Mr. Kevin Johnson:

With due respect, the start of the Senator's question and narrowing it down are not really the issue. I will address the first part which concerns what needs to be done. There are two major aspects. One concerns the lending in which one is allowed to engage and whether it sets out a roadmap to see credit unions evolve to the public banking-type model. We are concerned that the proposed limits do not do that.

The second aspect concerns access. If there is to be a public model, all of the public need to be able to access all of the services. That is a challenge for us. How it works is enshrined in legislation, but we have to find mechanisms that will allow credit unions either to introduce business to one another or to share the risk. I refer to loan participation and other such initiatives. Loan participation is the type of thing one will see in North America, for example. A smaller credit union may put only 10% of the risk on its balance sheet, while another may carry the rest. These are the types of practice we have to consider.

The credit union has been very successful in managing its own local business, but now it is a matter of determining how to introduce a wider range of services, inherent in which is a wider range of risks. How does one introduce services without jeopardising the credit unions? It is a matter of finding mechanisms by which they can share the management and handling of the risks on their balance sheets. What the Senator mentioned about shared services still does not address the matter. It helps with the efficiency of delivering the service, but it does not address the management of the risk because it still has to reside on someone's balance sheet. That is the arrangement as structured.