For the folks at IAC, unhappiness Is just a guy named Max
IAN URQUHART,MANUEL ESCOTTMay31976
For the folks at IAC, unhappiness Is just a guy named Max
Canada’s largest finance company assures the public that it puts “money in action.” Certainly, with consolidated assets of nearly $2.4 billion, IAC (Industrial Acceptance Corp.) Ltd. has plenty of money to work with. But in its bid to turn itself into a chartered bank, the firm is encountering problems stemming mainly from the federal New Democratic Party.
During the 1972-74 minority government in Ottawa, the NDP held (and enjoyed) the balance of power. But since the 1974 election, when the party was reduced to a rump of 16 MPS and the Liberals recovered their majority position, life for the NDP has been less enjoyable. Occasionally, though, an opportunity presents itself, which is what has happened with the proposal to convert IAC into the Continental Bank of Canada. Some of the biggest names in Canadian business (including the Saltsman (above) and Land: not so much mighty Bronfman family) are behind the the NDP’s principles as lAC’s principals
idea, and the NDP is having a great time staging an old-fashioned filibuster.
The bill to incorporate what would be Canada’s twelfth chartered bank will probably die on the order paper when the parliamentary session ends this summer. Since such bills are sponsored by private members (in this case by backbench Liberal John Reid) rather than by the government, they have a low priority on the Commons agenda, and the Continental Bank bill is lucky to be alloted one hour of debating time every two weeks. Given its determination and its informal alliance on the matter with the Social Credit Party (which views banks as the root of all evil), the NDP is having no difficulty sustaining its filibuster during the Commons’ intermittent consideration of the bill.
Leading the campaign is NDP finance critic Max Saltsman, 54, a veteran of 11 years in the Commons. Saltsman assembled a blue “filibuster kit” for his caucus colleagues, listing among other things the directors of IAC and their outside interests. It also listed the bank directorships held by various senators, even though they abstained from voting on the Continental Bank bill. Saltsman’s colleagues have responded with gusto, taking turns filling up debating time by reading the lists into the parliamentary record.
Last fall, IAC’S bid to become a bank appeared to be in the bag. After all, it was stated government policy to encourage the creation of new banks. Two others, the Northland and the Canadian Commercial and Industrial, had gained Commons approval earlier in 1975—the first after just two hours of debate, the second after only 20 minutes. Indeed, the Continental/iAC bill sailed through the Senate in just two
weeks and gained swift approval in principle in the Commons December 12. But then Saltsman was appointed NDP finance critic and the filibuster began. An unorthodox economic thinker who doubts that more “competition” will lead to improved economic performance, Saltsman was troubled by the fact that 10 of IAC’S 18 directors were also directors of banks or trust companies. (At IAC’S annual meeting in Toronto April 22, seven IAC directors who are also directors of deposit-taking institutions resigned from the board, in beforethe-fact compliance with Bank Act regulations. Among those who stepped down: multimillionaire Charles Rathgeb and Louis Lapointe, one of the five charged in the Sky Shops affair.) Noting that the IAC proposal was unopposed by any existing bank, Saltsman remarked: “There is a coziness here which disturbs me.” Equally upsetting, says Saltsman, is the number of exemptions to normal banking regulations the Continental legislation contains. Under the umbrella Bank Act, no single shareholder may own more than 10% of a bank. But Carena-Bancorp Inc., controlled by Peter and Edgar Bronfman, holds 19% of IAC. The Continental bill would give them four years to comply. Another regulation forbids banks from getting directly involved in leasing, IAC is heavily into leasing and wants 10 years to phase itself out. Saltsman maintains that the Continental bill ought to be held up until the government and parliament complete their current review of the Bank Act. “We are not opposed to IAC turning itself into a bank,” says Saltsman, who adds that the NDP isn’t even decided on whether banks should be allowed in the leasing business (where they are all eager to be). “What we are saying is that we don’t think it’s appropriate to drag it in through the back door.”
For its part, the company is quietly hopeful that eventually its bill will be passed. It has the support of most Liberal and Conservative MPS. Both Tory finance critic Sinclair Stevens, who once tried to launch a bank himself, and Liberal MP Robert Kaplan are outraged at the NDP filibuster. IAC seems merely sad that it’s having so much difficulty, IAC president Joseph Land assured the annual meeting that, while he couldn’t predict when the bill would go through, he and the firm were continuing to plan the bank’s operation. Beyond that, he refused all comment. But another company executive said he was certain IAC would get a bank charter. “It’s just going to take a little longer than we thought.” IAN URQUHART/MANUEL ESCOTT
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