That, in the opinion of the House, the government should immediately abandon the idea of creating a common securities regulator, since securities regulations fall under the legislative jurisdiction of Quebec and the provinces and because this initiative is unanimously condemned in Quebec.
He said: Mr. Speaker, it is rather distressing that the Bloc Québécois has to put forward this morning the kind of motion you just read.
The fact of the matter is that the Conservative government, and the current in particular, seem to be obsessed with taking away from Quebec important rights with respect to financial administration and centralizing everything for all of Canada in Toronto. However, the securities commission, and anything relating to it, is a constitutional responsibility of the Government of Quebec.
We rise in this House because the Bloc Québécois is the torch-bearer of the consensus on this issue in Quebec and, in the budget brought down on February 26, the clearly indicated that he will be continuing with his steamroller approach to establishing a Canada-wide securities regulator, even though that is unanimously condemned in Quebec.
That is why the Bloc Québécois is bringing this matter to the attention of the House today. A clear message must be sent to the government that it would be unacceptable.
Why pay special attention to that issue? Because the whole area of securities represents an important sector of economic activity. For one thing, securities are fungible, negotiable and transferable instruments that can be listed on the stock exchange. The two main classes of securities are stocks and bonds, but there are others, such as certificates of investment and warrants.
Securities trading is currently regulated by Quebec and the provinces. In Quebec, the Autorité des marchés financiers is the agency responsible for regulating securities. For example, a company looking to issue a first series of shares on the Quebec stock market has to abide by the rules set out by the Autorité des marchés financiers. We share a passport system for securities regulation with the securities commissions of the other provinces, except Ontario. That province has taken the approach of the current . This shows that his attitude is really to move toward giving to Ontario a responsibility that is currently that of the provinces and which, in Quebec, has always been carried out seriously.
It is important that the public know that the Bloc's position is also the unanimous position of the National Assembly of Quebec. It is not a position taken solely by the representatives of sovereigntists. On this issue, we represent the entire National Assembly of Quebec in this House.
I will read the motion adopted unanimously by the National Assembly on October 16, 2007.
THAT the National Assembly ask the federal government to abandon its Canada-wide securities commission project.
The wording could not be clearer. The motion indicates that the three parties in the National Assembly of Quebec want the federal government to stop the offensive that the Liberals began and the Conservatives have continued, because what the government is doing is not what we want.
Even after this motion was adopted in October 2007, the decided on February 26 to go ahead. He heard from Quebec's finance minister, who, on this issue, shares our views and speaks for the Government of Quebec.
I want to read the letter that Monique Jérôme-Forget, Quebec's finance minister, sent Mr. Flaherty on February 28, two days after he brought down the budget.
I have noted the appointment of your expert panel charged with making suggestions and recommendations concerning securities regulation in Canada.
And here, every word is important. The minister goes on:
First of all, I reiterate that the existing regulatory system in Canada works well and satisfies both the needs of pan-Canadian participants and the interests of the various regions. Accordingly, I will continue to oppose the implementation of any model leading to the concentration of market oversight responsibilities in the hands of a common or single regulator, regardless of how you call it.
Quebec's finance minister is clearly saying that she does not want anything to do with the model that the federal wants to put in place and that he talked about in his budget. She goes on:
The passport system that the participating provinces and territories are setting up is a significant and unprecedented initiative to further simplify matters for pan-Canadian participants. It is a cooperative approach by the provinces and territories that enables them to continue to monitor their local interests. The systematic refusal to acknowledge the advantages of such a system leads me to wonder whether all this effort is truly aimed at improving protection for the investing public.
Quebec's finance minister is wondering whether the current federal effort is truly aimed at improving protection for the investing public and we might ask ourselves the same question. Indeed, as far as the issue of securities is concerned, the model developed in Quebec and Canada has been recognized by the International Monetary Fund as an excellent model for providing satisfactory services using a decentralized approach.
In the past, on a number of occasions, some original initiatives have been taken in Quebec and other provinces. Just look at the stock savings plan implemented by Jacques Parizeau. This was followed by action focusing on how to ensure compliance with the law. Recently there was the Norbourg case where a person was sentenced to 12 years, which is something we have never seen the federal government do. And, the RCMP did not get involved in this case even though it could have.
The current model in Canada has the flexibility that we wanted to see in the Constitution. Quebec, for whom we represent the consensus here, would like that model to be upheld.
I will continue to read the letter from Quebec's finance minister.
I must say that the federal government could apply its energies much more productively if, in its fields of jurisdiction, it worked to more effectively crack down on economic crime rather than trying to impose itself in a field of exclusive provincial jurisdiction.
This is nothing new. The federal government, which has never been able to stick to its own jurisdictions, is always tempted to meddle in other areas of jurisdiction. Securities are the 's current obsession.
I am going back to the minister's letter.
Given the mixed, to the say the least, results it has achieved in combating economic crime, in spite of the money spent, it seems to me that the federal government is not doing enough to assume its responsibilities, in particular regarding criminal law.
I think the Quebec finance minister's opinion is quite accurate—harsh, but accurate—and that indeed the federal government would do much better to take care of its own responsibilities than to try to meddle in those of others.
I will finish reading the letter from Quebec's finance minister.
As for the expert panel—which the minister appointed—I note that you have ignored the proposals made to you by the Provincial-Territorial Council of Ministers of Securities Regulation. In so doing, I believe you have missed a good opportunity to obtain information that would have helped you better understand the point of view of the provinces and territories. Unfortunately, I fail to see that yet another panel, whose conclusions seem predictable to us, can bring anything new to this debate.
Believe me when I say that I am sorry to see you invest your effort and good will, which I in no way doubt, in such an ill-advised initiative when your energies could be applied much more productively.
A copy of this letter was sent to all the ministers responsible for securities and to the members of the panel.
Quebec's finance minister is clearly disapproving, taking the same line as the unanimous motion by Quebec's National Assembly. The minister has also harshly criticized the 's manipulative use of the panel. We should remember that initially, this panel was created to evaluate the existing system and the other possibilities. But the Minister of Finance decided to use it as a tool to help put forward his proposal. The budget clearly mentions a “common securities act” that the minister wants to develop by the end of 2008 for all of Canada. The Bloc Québécois is against this, as is all of Quebec. Quebec cannot allow such an important tool out of its control.
Let us remember that there is an international securities association, and that within that association Quebec speaks for Quebec. We will recall the entire process we went through over the idea of the Quebec nation, the motion that was adopted here. So what we have here is a double standard. A motion about the nation is adopted, and on the other hand the federal government’s action would aim to deprive Quebec of one of the rare areas where it can speak directly to the international community, through the international securities association. Essentially, this amounts to the federal government looking for information so it can go and speak on the international scene about a matter it does not control. Quebec is at the controls in this area, and wants to stay there. That is what our motion is intended to do today.
We are innovators in this area. We have developed a passport system with the securities commissions in the other provinces. The passport system facilitates interprovincial transactions. This means that a business in Quebec that intends to issue shares or do something involving securities will be able to use that system to do it based on its recognition in Quebec and to do it in the other provinces.
This is a screening system comparable to what in fact exists through contacts between education ministers in the various provinces. This is where Quebec wants investments to be made. The system has to be as permeable as possible to enable companies to do business in all of the provinces, in a way that is completely consistent with the jurisdiction exercised by Quebec and the provinces in this area. As well, the federal government would have to abandon its attempt to bulldoze the province’s responsibilities into its own yard.
In Quebec, the Autorité des marchés financiers is the body that enforces the rules of the game in terms of regulating the processes by which a business issues shares and bonds. The Autorité des marchés financiers can apply sanctions to businesses or individuals who fail to comply with the Securities Act. The Autorité des marchés financiers can initiate prosecutions in the Court of Québec leading to fines and imprisonment for individuals who are convicted. However, those prosecutions are not under the Criminal Code, as in the case of Vincent Lacroix. Although he was convicted under the Act respecting the Autorité des marchés financiers, which is legislation under Quebec’s jurisdiction, other charges might be laid under the Criminal Code by the RCMP, which is under federal jurisdiction.
The passport model developed in Quebec and the other provinces corresponds exactly to the model that currently exists in Europe, between sovereign countries that apply the same system. Please do not tell us that the current model in Quebec is outmoded. The European Economic Community is a very modern body that is expanding and that decided to go ahead and do this. We would hope that the federal government will exhibit the same openness so that the system can be modernized to allow for greater transfer permeability, while not interfering in matters under Quebec’s jurisdiction.
The mission of the Autorité des marchés financiers is to enforce the legislation regulating the financial sector, including insurance, securities, deposit institutions—except banks, which are under federal jurisdiction—and the distribution of financial products and services. More specifically, the Autorité des marchés financiers must provide assistance to consumers of financial products and services and ensure that the financial institutions and other regulated entities of the financial sector comply with the solvency standards applicable to them as well as the obligations imposed on them by law.
There are all kinds of issues, in this regard, subject to the Civil Code. We have two different systems in Canada: the Civil Code in Quebec and common law in the rest of the country. We have different ways of doing things when it comes to how securities are handled, and that is one of the reasons why we want Quebec to retain full responsibility for this sector.
The Autorité des marchés financiers also supervises the activities connected with the distribution of financial products and services; supervises stock market and clearing house activities and monitors the securities market; sees to the implementation of protection and compensation programs for consumers of financial products and services; and administers the compensation funds set up by law.
The different system we have developed in Quebec reflects our social values, which have rubbed off to some extent on how securities are handled. If there were just one Canada-wide system, all the particularities of the Quebec system would immediately be lost, and that is another reason why we want to continue with our own system.
Take, for example, the federal restrictions on insurance retailing by banks. In Quebec, we decided a long time ago to allow the Desjardins Group to operate in this market to facilitate its interaction with consumers and provide them with more choice. The initiative shown by a man like Jacques Parizeau, who often proved very innovative in the use of financial tools to help Quebec develop, was instrumental in the emergence of a system unique to Quebec. We could not have developed these tools under a federal, Canada-wide securities regulator, and most importantly, we would no longer be able to in the future.
Under all its responsibilities for securities, the Autorité des marchés financiers oversees the proper operations of securities markets and ensures the protection of investors. To do this, it analyzes disclosure documents regarding securities distributions or public offerings. The entire language issue also arises in this regard. Under a Canada-wide system, things would be done quite differently.
The Autorité des marchés financiers makes sure that reporting issuers, i.e. all organizations that have issued public offerings, provide securities holders, the shareholders, and the other market participants with the financial statements, MD&As and other documents required by law and regulations.
It ensures that securities issuers and other financial sector participants adhere to their obligations, for example, by filing insider reports within the specified time periods. It also oversees the establishment and implementation of orientations and regulations pertaining to capital markets.
It is very clear, therefore, that this an entire sector of the economy that is very important and growing ever more so because of all the things being taken over by the private sector. There are also all the international activities with the globalization of capital.
The fact that each province has its own regulators means we can have different, more flexible approaches. We want this social value maintained. We do not want it all changed, either for the Canadian economy as a whole or for Quebec, which has developed its own approaches and wants to continue implementing them.
Unfortunately, the 2008 budget confirmed the Conservative government’s intention to establish a single commission. To do that, the minister mandated an expert panel to prepare a bill that would create a single securities commission. That means the House will be asked to deal with a bill that flies in the face of the constitutional responsibilities of Quebec and the provinces on this matter. I do not know how the bill will be drafted. Will they be forced to use a notwithstanding clause? Do they want to open the whole constitutional question? Will they try to slyly get around it using regulatory amendments or special approaches? Is the trying to come up with a negotiating tool that will encourage Quebec to give in? Quebec will not give in on this issue because it is unanimous and wants to retain its authority in financial markets. That is one of the strengths of our economic action and we want to be able to retain it. Let us remember that the expert panel's report will be presented in late 2008.
In our opinion, this is an unacceptable situation. The minister stubbornly persists with a bill that goes against the unanimous vote of the National Assembly, which is a flagrant violation of Quebec’s constitutional jurisdiction. We will continue to defend Quebec against the centralizing tendencies of the federal government.
It was a waste of time changing the government. We are always faced with the same situation. Those who were elected—or at least those elected members who talk about decentralization during election campaigns and, more specifically, the current —wanted to give Quebec its rightful place. The day after the election, we were already starting to feel this. As time goes by, the government, whether Liberal, Conservative or other, has been calling for a centralizing approach that is not appropriate and, in addition, does not correspond to fields of jurisdiction. The Bloc Québécois is now the best tool for defending Quebec on the floor of the House of Commons.
This seems to us once again a very flagrant example of the fact that the only solution is for Quebec to become sovereign. Once Quebec is a country, it will have authority in terms of financial markets. We will no longer be forced to deal with attacks such as the one the is now leading in an effort to change, indirectly, an existing provincial jurisdiction.
Since 2003, the matter has again moved to the forefront of federal politics. The Liberals established an expert panel when they were in power. In 2005, the Ontario government mandated a group of experts, led by Purdy Crawford, to examine the advantages of a single securities regulatory system. Clearly, that report was written to be able to say that it would be better to have a single regulator. The idea surfaced in the 2006 federal budget, where the government announced that it was committed to working with the provinces and territories in order to establish a common securities regulator.
In my opinion, we can clearly see the federal government's steamroller tactics, regardless of the party in power.
At the same time, we see the unanimous position of Quebeckers. This unanimous position was demonstrated in a Quebec National Assembly motion and is defended by the current Quebec finance minister, a federalist minister who finds the Conservative government's approach unacceptable.
The unanimous position of Quebeckers is defended in this House by the Bloc Québécois, which is calling on the House of Commons here today to force the Conservative government to stop its steamroller tactics. Despite past government initiatives, we would like to be supported on this. One thing that is certain is that all Quebeckers are behind us. We will not give up until the Conservatives decide to abandon this plan that in no way serves Quebec's economic future.
:
Mr. Speaker, I can assure the member for that my career aspirations are here as of Canada.
I am pleased to have this opportunity to comment on this important issue dealing with the best way forward in terms of securities regulation in Canada.
This motion brought forward by the Bloc does not meet the real challenge facing Canada today, which is a great challenge with respect to securities regulation in Canada. This issue needs to be addressed to protect our capital markets and to protect Canadian citizens. This issue is all the more urgent, given the turbulence that we have in capital markets globally today.
Our government believes that we must modernize our securities regulatory framework. This is a priority and an important component of strengthening our economic union in Canada.
[Translation]
That is why the government recently announced the creation of an expert panel to provide advice and make suggestions and recommendations concerning securities regulation in Canada.
[English]
This expert panel, chaired by the hon. Tom Hockin, will provide independent advice and recommendations to federal, provincial and territorial ministers on the best way forward to improve securities regulation in Canada. We look forward to a collaborative effort with the provinces and territories to build an even stronger Canadian economic union.
Our government has a good reason for taking action on this front. Canada has a strong financial services sector, one that spans the country from coast to coast to coast providing good, high-paying jobs for Canadians. There is no doubt that Canada has a great story to tell, one of economic success, visionary entrepreneurs, growing competitiveness and unlimited potential, and yet we have a capital markets regulatory system that is out of step with the western world.
We are the only industrialized country that does not have a common securities regulator. Our system of 13 regulators is cumbersome, fragmented and it lacks the proper tools of enforcement. To maximize our potential, the government's goal is to work in collaboration with the provinces and territories to develop a competitive advantage in global capital markets. That includes reforming Canada's securities regulatory system.
This goal flows from our long term economic plan for Canada called Advantage Canada which was published in October 2006. In that plan, we committed to focus on creating five key advantages for Canada. First is a tax advantage, which means reducing taxes for all Canadians and establishing the lowest tax rate on new business investment in the G-7. We have taken significant action on that front, most recently in budget 2008 with the tax free savings account.
Second is the creation of a fiscal advantage. This means eliminating Canada's total government net debt in less than a generation. We are well on our way to meeting that commitment.
Third is the creation of an infrastructure advantage, which means building modern, world-class infrastructure that promotes economic growth, a clean environment and international competitiveness. We are investing $33 billion over the next seven years, as well as $500 million in public transit, to ensure that Canada has a modern, high quality infrastructure to take us into the future.
Fourth is creating a knowledge advantage. We need to have the best educated, most skilled and most flexible workforce in the world. The government has invested significantly in knowledge, science and innovation.
Finally, Advantage Canada commits to creating an entrepreneurial advantage. This means reducing unnecessary regulation, red tape and increasing competition in the Canadian marketplace.
Specifically, we committed to securing a competitive advantage in global capital markets. In budget 2007, we followed through on that commitment with the capital markets plan. To put the plan in context, in 2004 all provinces and territories, with the exception of Ontario, agreed to a process to create a passport-style system to regulate securities.
Those initiatives narrowed regulatory differences, harmonized and streamlined securities laws, initiatives that are important to achieving a more efficient and effective regulatory system in Canada. Through their actions, the provinces and territories have demonstrated a clear commitment to improving our securities regulatory system.
Those actions, although commendable, do not go far enough or fast enough. With the passport system, Canada still has 13 securities regulators, 13 sets of laws, however harmonized, and 13 sets of fees. Moreover, the passport system lacks national coordination of enforcement activities making it difficult to maximize results in this critical part of the securities system.
Furthermore, the passport system does not address our need to improve policy making. It is still necessary to obtain agreement from 13 regulators to make changes to rules. This is just too cumbersome. In short, the passport system is not where Canada needs to be in today's global economy.
Where do we go from here? The vast majority of capital market participants and observers agree that we could no longer afford to sit back and watch our competitors pass us by. We have great advantages to offer here in Canada: an educated labour force, social benefits and a strong economy. Now is the time for a more efficient capital market system. The benefits of a common securities regulator are well known.
[Translation]
Furthermore, unlike what the Bloc Québécois across the floor would have us believe, the creation of a single securities regulator would allow all regions of Canada to have a say.
[English]
In fact, such a solution would make the regulation of our markets more responsive and accountable by creating a decision making body that would coordinate the views of all jurisdictions promptly and fairly.
I say again, as I have said before, we are not talking about a federal securities regulator. We are talking about a common securities regulator for Canada.
Recent developments in global capital markets underscore the need for a mechanism that will provide Canada with the policy and regulatory capacity we need to react quickly and effectively to address new and emerging issues. Let us look at the advantages of a common securities regulator. There are numerous advantages for Canada.
First, a common securities regulator would improve market efficiency and ensure the best use of money and resources, and make the system more efficient to operate. This, in turn, would lower costs and make it more affordable for all who benefit from it, both those with capital to invest and those with businesses to build.
Another advantage is that a common securities regulator would improve enforcement and better protect investors with a common set of sanctions and remedies, as well as better enforcement across the country. Indeed, by serving as a single point of contact for law enforcement agencies, both at home and abroad, Canada would be better placed to share information and detect market fraud.
Moreover, we would be able to set clear enforcement priorities across the country while making sure investigation and enforcement resources are deployed efficiently. As I mentioned earlier, a common securities regulator would give all regions of Canada a real say.
[Translation]
In fact, the creation of a common regulator would better serve our common interest by establishing a structure that would allow all regions of the country to participate in market regulation in a more meaningful and constructive way.
[English]
Having such a structure would ensure meaningful participation by all provinces and territories, with a strong presence in all regions and local expertise that would respond to regional needs, for example, the oil and gas industry in the west or the futures market in Montreal.
Canada is a respected voice on the international stage. A common securities regulator would also allow Canada to speak with one voice. Speaking with one voice can only serve to enhance the protection and promotion of the interests of Canadian market investors and businesses. I have been pursuing the concept of free trade and securities with my counterparts in the United States, the G-7 and international partners that share high standards of investor protection.
Under a mutual recognition of each other's regimes, our investors would have better access to global opportunities and businesses listed on our exchanges would have better access to global investors. It is a win-win proposition.
The bottom line is simplicity and effectiveness. A common securities regulator represents an opportunity to move toward simpler, more principles-based regulation. Let us face it, Canada needs a regulatory framework that is world class and this is the way to do it.
[Translation]
We need a framework adapted to the make-up of our capital markets, with both Canada-based global corporations and a large number of small and medium-sized businesses. Too many complex rules get in the way of both efficient financing and effective investor protection.
[English]
Exerting further leadership and developing a single code for Canada with the right balance of rules and principles would help establish a clear competitive advantage for Canada in global markets. Clearly, this is an advantage to a common securities regulator.
Our securities regulators are engaged constructively, but our capacity to implement a strategy and secure an agreement for all of Canada would be greatly enhanced with one regulator clearly accountable to negotiate on Canada's behalf.
I have made the case to all ministers responsible in the provinces and territories that we must look beyond the passport system. To that end, as I mentioned at the outset, that is why we have established an expert panel to provide advice on how to best move forward on developing a model common securities act to create a Canadian advantage in global capital markets.
In closing, let me be clear. Establishing a common securities regulator, breaking down interprovincial trade barriers, and strengthening Canada's economic union are all priorities of our government.
:
Mr. Speaker, the Liberal Party of Canada recognizes that the creation of a national regulator, with the collaboration of all provinces, regions and territories, would be greatly beneficial for the economy of all regions of the country. The Liberal Party also recognizes that the contribution of provincial regulators is flexible and specific to the needs of their regional markets. In addition, the Liberal Party is not opposed to a national process and is therefore opposed to this motion.
Finally, the Liberal Party still wants to study, together with the provinces, a national securities regulation system which will improve coordination and regulation, while responding to the particular needs of all regions.
[English]
While the Liberal Party of Canada believes that securities regulation remains in the jurisdiction of the provinces, we also recognize that the creation of a national regulator through the cooperation of all provinces and territories would be of tremendous value to the economy in all regions of the country.
As the has just cited, my colleague, the member for when he was finance minister was certainly in favour of a national, not necessarily a federal, regulator. He believes, as I believe, that while the passport system perhaps represents progress vis-à-vis the status quo, it is not sufficient to accomplish the full objectives which we have for national securities regulation.
This debate is among the oldest debates in this House. In fact, it goes back to the early 1900s when provinces noticed that the federal government was taking little or no action with regard to securities regulation. I think we could almost say it is a non-partisan issue going back as it did to 1905. As a result of this void the provinces began drafting their own securities regulations, and this is how Canada developed its current patchwork of regulations which we have in this country today.
Many of the countries which were engaged in the development of securities regulation around that time opted for a different route. The United States, for instance, saw several states creating their own separate securities laws as inefficient and chose to create the federal U.S. Securities and Exchange Commission in 1934.
The goal of each provincial regulator is essentially the same: regulate securities trades; ensure that appropriate levels of information about publicly traded companies is available to investors; conduct prospectus reviews; and protect investors through enforcement activities.
While this was a reasonably effective way to regulate the securities industry in Canada throughout much of the 20th century, times are changing. In the 20th century, global capital has become so fluid that investment decisions can easily be made based on the fact that securities regulation in one country is too onerous vis-à-vis another country.
The majority of provinces, however, have indicated quite clearly that they are not in favour of a national system. The Quebec National Assembly has indicated it is not interested. When the Alberta finance minister mused that it was time for one, he was sternly rebuked by his premier, who reiterated that his province was not interested.
Ontario is the only province that has consistently been in favour of a single regulator. This, however, has put Ontario at odds with the provinces which are now working toward building a kind of passport system through the Canadian Securities Administrators, or CSA.
The CSA is a forum where the country's 13 individual securities regulators meet to ensure that their regulatory efforts are somewhat coordinated. It is through this body that the majority of Canada's provinces are currently working to implement the passport system.
In just seven days the CSA will officially launch the next phase of that plan. As of next Monday, when a review of a prospectus is approved in one province, it will now automatically be cleared in the provinces and territories that have signed on to the passport model.
The CSA has also announced that the next phase in implementing the passport system will be the creation of a passport that recognizes the registration of securities. Some organizations have lent some tepid support to the passport system, indicating that while not great for Canada, it would be better than the current system. Others, like the Canadian Bankers Association, have indicated that while the sentiment is there, the passport system could actually turn out to be even worse for Canada.
Meanwhile at the federal level, we have had nothing but bungling from Canada's . The good news is that if markets value consistency, and I guarantee that they do, they can always count on Canada's finance minister to bungle some important file.
The list is so long I would run out of time to try to encapsulate all of these areas, but I would start with income trusts, which is the obvious case of a broken promise that caused some $25 billion to go up in smoke in a single day and which in fact has caused additional tax leakage rather than resolved the problem of tax leakage.
I would also mention interest deductibility, from which thankfully the minister backed down under pressure from Liberals and the business community, but would have been an absolute disaster for the competitiveness of Canadian companies operating abroad.
I could mention as well the GST. The government invested $12 billion a year in a GST tax cut, thereby forgoing huge opportunity for meaningful cuts in income tax or meaningful support for post-secondary education, as was reflected in the private member's bill from the Liberal side the other day. The minister's overall record of economic management is a sad story.
I should mention a few words about that also in the context of the private member's bill. As my colleague from Lachine, I believe, pointed out, when we were in government and the member for was the finance minister, and before him when the member for was the finance minister, we always had at least a $3 billion contingency reserve that would respond to unforeseen shocks, whether these shocks came from SARS, 9/11, a U.S. recession, an Asian crisis, or an ice storm. The world is an unpredictable place, but parts of the world are predictable, and one of the predictable parts of the world is private members' bills that are in the pipeline.
The private member's bill was in the pipeline two years ago. It was actually introduced two days after the raised income tax in his budget. It seeks to provide meaningful support to Canadian parents and grandparents and students who wish to undertake the very expensive but very necessary activity of post-secondary education. This, unlike the minister's pathetic savings plan in comparison, would have provided meaningful support for this activity.
Had the minister behaved in a fiscally prudent and responsible manner, he would have been aware that this was coming down the pipeline. Rather than spend in a drunken fashion in his first three years in office when the economy was prosperous, he would have forgone a little bit of that spending during good times so as to have an adequate reserve at this time, when times are difficult, in order to absorb items like the private member's bill on RESPs.
What has he done? He has instead taken us so close to the edge where the projected surplus next year is $2.3 billion, and the year after it is $1.3 billion, far lower than any responsible government would take the country, thereby leaving us open to a return to deficits, whatever the nature of the shock may be, whether it is a private member's bill or some other item to hit the economy.
As I have said, the Liberal Party will oppose this motion. We are in favour, not of a federal single regulator, but of a system of national regulation, as has been reflected in the views of our governments in past years.
:
Mr. Speaker, the best way to get an answer is to ask questions. At least the person who just spoke, and who boasts about being from Quebec but speaks only in English when he rises, will have his answer right away.
The New Democratic Party opposes the creation of this body and supports the Bloc Québécois motion for reasons that I will explain in the language of Shakespeare, for the benefit of my colleague. I am going to read him a brief excerpt from the Financial Post last October:
[English]
The Council of Ministers of Securities Regulation (representing all provinces and territories, except Ontario)--
I think our finance minister has a little trouble understanding that he is no longer an Ontario minister. He is too busy with his choo-choos. The quote continues:
--wants the public to know the facts regarding Canada's securities regulatory system.
Canada's securities regulatory system has recently been the subject of intense negative rhetoric--
Like that which we have just heard from the Liberals.
The quote continues:
--from those who advocate creating a single securities regulator. Led by [the] federal Finance Minister...critics contend that our current system, with regulatory authority falling to the 13 provinces and territories, is cumbersome, ineffective and costly. After the acquittal of the former vice-chairman of Bre-X, [the minister] criticized Canada's securities regulators and described securities enforcement as “an embarrassment internationally to Canada”. He has also suggested that a single regulator is necessary in order to pursue free trade in securities with the United States and other G7 countries. Unfortunately, most of this criticism is based on myths, not facts.
That, Mr. Speaker, is the case.
[Translation]
Yes indeed, there has to be cooperation and the work has to be done in unison by the provinces, in the same way that the Canadian Institute of Chartered Accountants is always refining what are considered to be generally accepted accounting principles. There are no problems in that regard. But this is not something that can be imposed from the top down. Everyone has to work together toward that ultimate goal.
What we have before us is an absolutely classic example of federalism as it was practised in the era of the Liberal Party of Canada. So imagine our surprise to see that the is winning the battle with his Prime Minister, the very who prides himself on being someone who has understood that Quebec, in particular, is a nation within Canada. He is telling us to forget that. His answers are getting increasingly strident and increasingly caustic. He says that the federal government alone should be the one on top when it comes to these things.
I might suggest that we should look at the facts when it comes to the supreme power and jurisdiction of the federal government to regulate white-collar crime. It is indeed true that in Canada, economic crime is given a fair bit of latitude, compared to what happens south of the border.
If we want to see how it works when the rules are properly enforced, we need only look at what happened with the case in which judgment was recently given concerning the Norbourg company and Vincent Lacroix. Vincent Lacroix was sentenced to 12 years in prison by the Quebec courts under the provincial regulations. How many prosecutions came out of the sponsorship scandal and the superb work done by the RCMP? Zero, not one, nada. That is the real result of what goes on here in Ottawa.
We saw it again with the ethics committee, regarding the Mulroney-Schreiber affair. We learned that while the Liberals were paying out $2.1 million of taxpayers’ money to Brian Mulroney to settle his action, the investigators had not even interviewed Mr. Schreiber. When that was disclosed for the first time in committee, the RCMP sent a spokesperson to say, “That is not true, we interviewed him.” Yes, but they interviewed him after the settlement. That is very clearly the question that was asked.
Open up professor Johnston's report on the Mulroney-Schreiber affair, and what does it say? Contrary to what we were told, the RCMP did interview him. Then there are the marginal notes, which list all of the dates, and once again, it looks like that happened after the settlement. How can it be that Mr. Pellossi, for example, was never interviewed? Why is it that most of the time, the federal government's so-called excellent work on economic crime fails to show results?
If Conrad Black had been tried and had been the subject of an investigation here in Canada, he would be sitting in a nice restaurant in Toronto, smoking a cigar, instead of sitting in the big house. That is the reality of what we have seen up to now.
The provinces definitely do not need a lecture from their big brother, the federal government. What a speech we heard from the Liberals earlier. What an incredibly haughty attitude toward the provinces. Sometimes in this House, the masks come off and we can see people for who they really are. This afternoon, when we vote on this issue and the Liberal members stand up one after the other to vote with the Conservatives, they will prove that the Gerard Kennedys of this world, those who deny that Quebec is a nation within Canada, hold sway in their caucus. They are trying to justify how Justin Trudeau can still be an official Liberal Party candidate even though he too argues against recognizing Quebec as a nation. This is not complicated: they do not believe it.
They refuse to look at the evidence. They do not care about the facts. Their only goal in life is to prove that Ottawa knows best, even in matters of shared jurisdiction, like the regulation of financial markets and securities.
The Bloc Québécois motion, the opposition motion, states:
That, in the opinion of the House, the government should immediately abandon the idea of creating a common securities regulator, since securities regulations fall under the legislative jurisdiction of Quebec and the provinces and because this initiative is unanimously condemned in Quebec.
The last phrase—unanimously condemned in Quebec—is absolutely true; but that is not all. Who is Greg Selinger, the author of the quote I read earlier from the National Post? He is the chair of the Council of Ministers of Securities Regulation and also the minister of finance for Manitoba, your province, Mr. Speaker. He and the Bloc Québécois are saying exactly the same thing, that there is nothing to prevent us from working together.
I would like to congratulate another colleague from Winnipeg, also a man of vision. He studied this matter knowing that white-collar crime is an everyday concern of Canadians. People see what goes on and wonder why we cannot implement standards and why we are not more successful.
We will not solve anything by having Ottawa pass a single set of regulations that will be made in Toronto. This is another bad sign for Montreal, which has already suffered enough—thank you very much—from the flight of capital, organization and service structures to Toronto. It is wrong to let people think that, henceforth, Ottawa will be in charge. It is as though we were unable to agree on the objectives, which are to have a passport system. Mr. Selinger spoke about this in the article I referred to. For those of you who are interested, you can find the article online in the October 26, 2007 edition of the National Post.
There is nothing preventing us from reaching an agreement on the guidelines. They should stop believing that, by pushing for centralization, as the Liberals always did and, to my surprise and disappointment, as the Conservatives are doing today, we will obtain better results. That is the issue. They feel they have to get results. Let us stop messing around about the methods, claiming that, by centralizing and dictating from the top down, the federal government will achieve better results. We have proof that the provinces that put in the necessary resources can obtain results without compromising the initial agreement.
There is a paradox, here, that I want to explore a little. People on that side of the aisle want Quebec to leave Canada. That is not what we want. We believe—and the NDP’s Sherbrooke declaration proves—that we can adapt on a case by case basis and by resorting when appropriate to asymmetrical federalism, which takes these different approaches into account. When it comes to the environment, some provinces and especially certain territories have very limited resources in an area of shared jurisdiction. The environment is actually a bit like securities: it is shared between the federal government and the provinces. Some provinces simply want to leave all the investigations up to the federal government because they lack the resources. That suits them, and they sign agreements to that effect. Good for them, it is fine with us. Just as we do not want to be told how to do things, we do not want to tell the other provinces what would be best, what the best practices are and how best to achieve results.
Whether in regard to the environment, the regulation of corporations, or the regulation of securities, we should go out and find the best practices. We should see what our neighbour is doing best. We should reach agreements and set up a passport system that allows for the free flow of services. That is much to be desired in today’s world. In the area of professions, for example, we want people’s credentials recognized when they come from another country or another jurisdiction. All the better if people who provide services can circulate freely. We do not have a problem with that. The free flow of services is at least as important in a country as the free flow of goods. Bring it on.
There are some conditions though. In Quebec, for example, there has always been a language requirement for professions going back to the 1960s, long before bills 101 and 22, and that could be the case here. We would also want to ensure that services are provided in accordance with ground rules with which everyone is familiar. It is interesting that the federal government has never tried to impose the generally accepted accounting principles on the Canadian Institute of Chartered Accountants.
It is the profession that has always done it. Why is it that they can accept decentralized deregulation when it comes to professions? It is because the results are there. When it comes to the provinces, though, they want to go back 30 years. They want to start playing the big brother who tells the others that there are incompetent so he will take over. Incredible. Where does that come from?
A little while ago, I heard a long-serving Liberal member impart the same old lesson we have been hearing for years. The Liberals are incapable of change, incapable of realizing that it was this kind of behaviour that gave rise to the Bloc Québécois in reaction to intransigent federalism. I was astonished. If we are incapable of realizing that the Canada of the 21st century must be different if it is going to continue to progress and evolve in the interests of its citizens—because that is what this is all about—we really will have a problem.
We are adding our voices to those of our Bloc Québécois colleagues on this specific issue because they are right. Paradoxically, they are the ones who are asking that the fundamental agreement, the Confederation agreement as it is set out, be respected. It is quite a paradox.
When it suits them, the Conservatives proclaim that the Québécois constitute a nation within Canada. As for the Liberals, they never believed that but they voted in favour of it, on the eve of their convention to select a new leader who, I can guarantee, never believed it. The vision of Gerard Kennedy, of Bob Rae and of the Leader of the Opposition is winning the day. We have an example of that today.
We in the New Democratic Party have studied this question for a long time. One of my colleagues has worked very hard on it. In all of her analysis, she has always assigned a very important place to understanding the need for a system of self-regulation that gives absolute priority to the public interest.
Some people listening to us outside Quebec are perhaps not familiar with the Norbourg affair. This case is still before the courts but I want to talk about some decisions that have already been rendered in the lower court. It is rather fascinating.
We stand up, one after another, members of all the parties —the Liberal Party, the Conservative Party, the NDP and the Bloc— to talk about the people’s interests. In the Norbourg affair, even though I just said with great satisfaction that the person involved was sentenced to 12 years in prison, the investors have still not been compensated. No one has yet found out where or how the money was hidden. As a result, small investors have lost their life savings. Whether it was $20,000, $10,000 or $50,000, they entrusted their money to people in whom they had confidence. The expression “to con” is based on “confidence.” These people where cheated and they lost their savings. The system is now applying the punishment but we must have structured regulations in place to ensure prevention, and not only the cure. That is the desired goal; that is the result.
They cannot make us believe, either in the NDP or the Bloc, that adding more weight to the system with a new federal structure will make it easier to obtain those results. That is false. We do not believe it. It is only the Liberals and Conservatives who believe in those fairy tales. For our part, we believe instead in a way of working together to obtain a result that will be accepted from one place to another. For that, there is no problem.
I was the Quebec minister of the environment for three years. That is an area of shared jurisdiction and issues can be settled effectively if we work with the provinces. We had a structure similar to what Mr. Selinger described in his article. We met together. However, from time to time, someone like the current Leader of the Opposition having delusions of importance came to play the role of the federal big brother. He came to stick his nose in and to tell us how to do things. He wanted to impose a reference framework designed in Ottawa. I worked strenuously against that approach when I was the Quebec minister of the environment.
Now, that I am a member of Parliament and a proud Quebec member of the NDP in this House, I shall expend that same energy to battle those same tendencies, which are cropping up again among the Conservatives over the way.
We do have a problem at the moment with the government and in particular its , who appears to be sorry not to still be in provincial politics. He is constantly squabbling with the government of the province he represents here in the federal parliament in Ottawa. Not a week goes by without press coverage of that rivalry and wrangling. He is gives even giving lectures on provincial fiscal policy. My point is clear.
The federal , not content merely with the great centralizing role we already know he plays, is now going so far as to start dictating in full detail the taxation policy the province ought to be using. If I may offer the federal finance minister a piece of friendly advice: let him live out his dream by going back to provincial politics. He is better suited to it and he will enjoy wrangling with the provincial people. The problem is that, at the moment, he is here at the federal level. The views he is trying to impose on everyone here are very small, narrow and limited.
In closing, let me state that the NDP will continue to push for a vision that will ensure protection for Canadians and respect for professionals. That is the result we want. The professional system in Quebec is unique in North America. It involves not just discipline, the curative aspect, but also prevention and inspection.
Any practice, be it lawyers, architects or one of the other forty or so professions that are regulated at the present time, is inspected by an inspection committee mandated by that professional corporation. This is a system that produces excellent results. Rather than wait for the train to go off the tracks, there is a bit of preventive maintenance to stop that derailment from happening.
The other provinces might find something worth learning in this approach that is specific to Quebec. By exchanging views on best practices we will succeed in creating a system that will produce the result everyone wants, so that people with savings, investors and those who have gone without in order to put a little aside to invest for their old age can see those savings protected. Is that not the point of the exercise? The aim is not to impose strong arm tactics preferred by the feds.
For all these reasons, and expecting some questions on this, I wish to state that the New Democratic Party will always work to protect the consumer, but it will do so not by centralizing or imposing, but rather by working collaboratively to ensure that this result is achieved.
:
Mr. Speaker, I am very happy to take part in this debate. Once again, because of the Bloc Québécois presence in this House, I feel that we can represent the views of Quebec as a nation.
Unfortunately, this is not the first time we have debated this issue. It seems that finance ministers—whether we are talking about the ministers in the former Liberal government or the minister in the current Conservative government—all have the same obsession. They all defend interests that may be those of Canada, because to them, a financial centre controlled exclusively by Toronto may seem worthwhile.
I would remind this House, as I did last Friday, that we are also dealing with a Conservative federal government whose economic development strategy is based exclusively on the development of gas, oil and the oil sands. The actions of this government show quite clearly that all other sectors, especially manufacturing and forestry, are left to their own devices. According to the Conservatives' vision, these sectors are not driving Canada's economic development. According to this logic, Canada would have, on the one hand, an economy where oil would be driving economic development and, on the other hand, a financial centre exclusively in Toronto.
I forgot to mention that I will be sharing my time with the member for .
That is the vision that is shared by many people in Canada's business community. But this vision is not shared by Quebec's business community. As I also said, it is not shared by everyone in Ontario's business community. In Ontario, it is very clear that a major manufacturing sector—the automotive industry—needs a different concept of economic development than the current government's concept.
This is the context in which we are debating the Bloc motion, which I would like to reread.
That, in the opinion of the House, the government should immediately abandon the idea of creating a common securities regulator, since securities regulations fall under the legislative jurisdiction of Quebec and the provinces and because this initiative is unanimously condemned in Quebec.
In my view, this motion should be naturally supported by those who want the spirit of the 1867 Confederation to prevail. Section 92(13) of the Constitution Act, 1867 clearly states that the exclusive powers of the provinces include property and civil rights, therefore they include securities. If one wants to abide by the Constitution of Canada, this initiative should not be considered. The should withdraw it. The government should stop supporting such a whim. Anyway, it will be challenged in court. It will likely go all the way to the Supreme Court. There will be again useless quibbling which will be detrimental to efficiency, since much resources will be spent on this new constitutional wrangle.
The paradox is even greater when we see this government, notwithstanding the interests of the Canadian nation, bring back this bill in spite of the fact that the House of Commons recognized the Quebec nation a little more than a year ago. Even though this is just rhetorics, the Conservative government likes to talk about open federalism. But the contradiction is quite obvious. About the substance of the issue, this proposal reveals a vision of the Canadian economy focused on oil, with a single, very strong financial centre in Toronto. However, this is not in the interest of Canada as a whole, and certainly not in the interest of Quebec.
Let me also remind members that the National Assembly of Quebec unanimously adopted a motion against the creation of a common securities regulator. In Quebec, sovereigntists and federalists alike unanimously say that this bill goes against the interests of Quebec and of the Quebec nation.
For the benefit of those who are listening to us, I would like to point out that this motion was passed on October 16, 2007. It is very simple. It reads as follows:
THAT the National Assembly ask the federal government to abandon its Canada-wide securities commission project.
Indeed, that is not only against the Constitution of 1867, but also against the best interests of the Quebec society, nation and economy.
We have to make it very clear that there are no obvious benefits flowing from the establishment of a Canada-wide securities commission, or even of something similar to that. We want to be very clear in that respect: the is not fooling anyone with his ploy. He tells us that he will respect the Constitution, since he will not force the provinces to adhere to this commission. It will be a Canada-wide organization, not a federal one. However, it is very clear that this single regulator—which is the minister's objective—will eventually put pressure on reluctant provinces.
If Toronto, Ontario and the federal government move forward with this project, along with a few provinces, they will ultimately try to create conditions such that Quebec and reluctant provinces will have to join this single securities regulator. The Toronto and Bay Street financial community has never made it a secret that the objective behind this is to ensure that Toronto becomes the only place of business.
I think it is important to point this out, because Quebec needs Montreal to be a major place of business. I will provide one example to illustrate the usefulness and importance of having an organization in Quebec, namely the Autorité des marchés financiers, under the responsibility of Quebec's public authorities.
This example relates to the merging of the Toronto and Montreal stock exchanges. Let us suppose that this merging does take place—and it appears that it is indeed going to be the case—and that there are no longer two securities commissions but, rather, only one in Toronto. What guarantees would Montrealers and Quebeckers have that the market rules set by the Autorité des marchés financiers du Québec would continue to exist?
Let me mention one very important such rule. We are told that the new entity created by this merging, which will be called TMX Group, will be subjected to the rule preventing a shareholder from detaining more than 10% of shares. That limit restricts ownership and it cannot currently be changed without the approval of the Autorité des marchés financiers and of the Ontario Securities Commission.
Imagine that the Autorité des marchés financiers no longer existed in Quebec. What guarantees would Quebeckers and Montrealers have that this rule would not be changed in a few years to allow centralization and a concentration of power in the hands of a group based essentially in Toronto?
It is very important therefore, even in view of the planned merger of the Montreal and Toronto stock exchanges, for Quebec to keep its Autorité des marchés financiers. The federal government’s and Bay Street’s insistence on a common securities regulator in Canada is counter-productive in view of this concentration and the strengthened stock market as a result of the merger, with Montreal remaining responsible for derivatives.
If there is no Autorité des marchés financiers to ensure that the ground rules are observed when the merger goes through, it is very clear and virtually inevitable that another strategy will be found to ensure that there is only one stock exchange in Toronto and the derivatives market is located there. This is totally contrary to the interests of Quebec, its economy and the Quebec nation.
The is trying to fool everyone. When the Bloc Québécois asks him and this government for fixed greenhouse gas reduction targets so that a carbon exchange can be established, it is in order to create the regulations that will allow a viable carbon exchange to be established. And why in Montreal? Because Montreal has the expertise in derivatives and therefore Montreal should get it.
This is not a political decision but a business decision and one that would be in keeping with the gist of the merger discussions that have been occurring between the Montreal Exchange and the Toronto Stock Exchange.
We are not asking the federal government to interfere. What we want from it is a regulatory framework conducive to a vital exchange of this kind.
:
Mr. Speaker, I would like to thank my colleagues for agreeing to debate securities. I am pleased to rise to speak to regulation. This matter, raised in the House by the Bloc Québécois, gives us an opportunity to shed new light on the myths perpetuated by the federal government in an effort to discredit the operation of the existing securities system.
The subject has been much written about these days, but we must not lose sight of the fact that the financial sector is a major employer. According to Quebec's Institut de la statistique, nearly 150,000 people are employed in the financial sector in Quebec together with a multitude of self-employed individuals in related areas. It is a large sector providing quality employment, a flourishing industry now accounting for 6.2% of Quebec's gross domestic product.
Then there is the Montreal Exchange. It has enjoyed exceptional growth, and its impact is felt beyond the borders of Canada. It currently has an agreement to carry out all derivatives trading ending in March 2009. Does this centralizing obsession veil intentions by the Toronto Stock Exchange to interfere with Montreal's place as a stock exchange and its expertise in the derivatives sector? I would hope not and would hope that Montreal will be allowed to develop the enormous potential of the derivatives market in Montreal.
That said, let us look at how things have developed.
There have been a number of proposals in recent years to restructure the Canadian securities regulatory system. The first, advocated by Ontario and the federal Minister of Finance, involves establishing a single regulatory body. The second is the passport system, that is, a harmonization of the provincial regulatory bodies in order to create an effective Canada-wide system. It involves building on what already works.
The provinces have already done a huge job improving securities regulation in Canada and its efficiency. Information technology has, for example, been improved. Canada wide systems and practices have been put in place. This means the elimination of many jobs previously done locally by the individual securities commissions.
Today, we have the system for electronic document analysis and retrieval, SEDAR; the system for electronic disclosures, SEDI; the national registration system, NRS; the national registration system database, NRSDB; and the mutual reliance review system, MRRS. In addition, 25 national guidelines and 24 national policies have been issued with respect to key matters, such as prospectus requirements, regulation of mutual funds, issue of royalties, regulation of take-over bids, prospectus and registration exemptions, ongoing information requirements, and so on.
Clearly, improvements have been made toward improving the operation of the entire securities system.
Of course, we can do better, and all the provinces have decided to implement a passport system. Ontario, which originally instigated the system, has decided to go off on its own, which is unfortunate. The federal government should encourage it to join the other provinces and territories in implementing the second stage, which is expected to take place by the end of 2008.
A Canada-wide passport system provides every person, issuer or registered broker, with a one-stop option for accessing Canadian markets. This change is not insignificant. It required a lot of effort by individuals and various governments, and the federal government has to recognize that. The passport system allows access to financial markets across Canada by dealing only with the securities authority that has jurisdiction. Any broker or representative that wants to do business across Canada simply has to register with the authority that has primary jurisdiction.
The passport system is based on what works well. It would help eliminate overlapping administrative tasks and be as efficient as a central agency.
In order to show good will, the federal government should encourage Ontario to join the passport system, stop going its own way and follow suit so as not to compromise the implementation of the second phase of the system. The of Canada should use his influence to encourage Ontario to listen to sage advice.
But the Conservative government insists on promoting its single securities commission. Some people here in this House, the among others, suggested that the government ask the Supreme Court to rule on the federal government's constitutional jurisdictions with respect to securities. It would be wise for the federal government to consult the provinces on this and not to embark on an operation that could leave a bitter taste.
We can look at the results and the criticisms of the current system. I can simply cite the Premier of Alberta. He made the following statement in a speech to the Empire Club of Canada in Toronto:
[English]
—I want to make my position...very clear. The passport system is a model provinces can quickly implement to create a national system—so let's accept the passport and move on to other matters.
[Translation]
On this, the Alberta position is fairly clear, as is Quebec's moreover, according to the statements by minister Jérôme-Forget. The present system compares favourably with that of other territorial jurisdictions. In 2006, a study by the World Bank and Lex Mundi ranked Canada third in the world out of 155 countries as far as investor protection was concerned, while the U.S. ranked seventh and the U.K. ninth. The 2006 OECD report placed Canada second out of 29 countries for the quality of its securities regulations, ahead of the U.S. in fourth position, the U.K. in fifth and Australia in seventh.
It is surprising, in the light of such results, that the federal government continues to denigrate the Canadian regulatory system, both here and elsewhere.
My colleagues have also spoken of the federal government's myths about the competitive nature of the Canadian market. The principal arguments are, first, that our regulatory system is more unwieldy and more costly, which is totally wrong. Second, that our regulatory system supposedly involves additional financing costs to business. Third, that the single commission would cut transaction costs on the secondary market.
As far as the first myth about the supposed higher cost of our regulatory system, I cannot understand that the government is making this as a serious claim. The direct costs of regulation per million of capitalization in 2002 were $145.80 in Canada, compared to $141.90 for the federal regulatory bodies in the United States. That is not much of a difference.
As for the second myth, once again the facts contradict the arguments in favour of a single regulatory commission as far as costs are concerned. For one thing, the factors determining financing costs are three-fold. First, there are fees to brokers, costs relating to legal fees, honorariums for prospectus preparation, and share cost evaluations. Studies show that the total average direct cost of small Canadian business issues is less than the American.
As for the third myth, reduced transaction costs on the secondary market, the solution in my opinion still lies in the competitive nature of Canadian capital markets. The real problem lies is the low level of market competition. That would not in any way be remedied by the creation of a single body.
The federal government ought to deal with some of the elements that do fall under its jurisdiction, including beefing up the means of sanctioning offences against securities legislation, in order to deal properly with white collar crime.
:
Mr. Speaker, thank you for allowing me the opportunity to speak. I am pleased to rise in the House here today as a member from Quebec, to speak to the motion brought forward by our colleagues across the floor.
Before I begin, I would like to indicate that I will be sharing my time with my colleague, the hon. member for , with whom I have been meeting for the promotion of the Canadian shipbuilding industry. He came to Lévis last summer and visited the Ultramar facilities where the transshipment of liquids takes place. He also saw the Corporation of Lower St. Lawrence Pilots' Centre de simulation et d’expertise maritime.
My colleague and I have businesses in our respective sectors. Where I am from, for instance, Prévost Car inc., IPL inc., Rotobec, and Etchemins would all like to have access to capital in order to compete with large corporations from around the world. This is why I am pleased to speak to this motion here today.
As we all know, there has been a lot of talk about the Norbourg scandal in Quebec. There has been a lot of talk about the little girls, for instance, whose grandfather had invested some money for them, which was misappropriated in the end. That was the only money, the only financial inheritance, left for those children. And it was misappropriated.
I am pleased to speak about this today. All the members in this House want to find ways to avoid having this happen again, and to ensure that our financial system is reliable and efficient, and that it allows our businesses to raise large amounts of money quickly, without encountering administrative barriers or red tape. We know that is one of the irritants. I owned a business, and I know how many forms there are to fill out.
However, my opposition colleagues did not fully understand what our government wants. We are not talking about a federal regulator, but a common regulator, created in collaboration with the provinces.
Currently, nearly 80% of regulation in the securities sector comes from Ontario. It is important for the regulation to be distributed throughout the country, particularly in Quebec, so that Quebec can have a greater say in decisions that affect it and in the management of national affairs—all, of course, in the context of open federalism.
There are currently 13 statutes, 13 unharmonized responsibilities. There are a lot of barriers to overcome. Sure, the passport system is a step in the right direction, but it does not solve everything. That is why I would like to speak about the initiatives our government wants to take to ensure that the financial system is a tool that helps businesses in Bellechasse, Les Etchemins, Chaudière-Appalaches and Quebec City move forward.
We are facing international competition, and we need to standardize. Take, for example, the Europeans, who are exchanging information through the European Union, enabling them to break down administrative barriers and to standardize. That is exactly what we want to do, in collaboration with the provinces.
It makes sense that it would be easier to do business within a country than it would be with a foreign country. We must also think about demographic weight. Trading is done on the market. We are competing with the Chinese market, the Asian market—these markets have billions of people.
Canada is a major economic force, but we have to put that in perspective. Even though we have access to the entire European and U.S. markets, we have to double our share in those markets to rival, in absolute numbers, what China and India alone are doing. We have to look at the big picture and that is what we are proposing.
Our financial sector is one of the most advanced and most developed in the world. The International Monetary Fund has said so. In fact, it said so just recently when it evaluated the financial sector. The International Monetary Fund said that Canada has what it takes, but there is just one thing missing. It said that our financial system is solid because of its banks and, of course, its cooperative movements.
As a matter of fact, Lévis is the home of the largest financial cooperative movement in Canada, the Desjardins group, which, again this year, has declared record surpluses and dividends that will go into its members' pockets. These Quebec and Canadian financial institutions are in good shape and are well funded. Nonetheless, according to the International Monetary Fund, the system must and can be improved.
When talented people and capital cross borders, market competition becomes fierce. We must improve the system if we want our Quebec and Canadian companies to perform well on the global market. What does the International Monetary Fund say? It says that even though the banking system is in good shape, we are faced with challenges in the midst of the global financial crisis that has been observed since the middle of 2007.
The IMF has recommended adopting a common securities regulation system in order to improve the Canadian system. An international agency has given its advice. It did not say a federal system, but a common system; one that is established with the provinces and allows Quebec to play its full role within Canadian financial markets.
Our government acknowledges that this financial market must indeed be improved if the economy is to become more solid and more prosperous. We want our economy to perform and our manufacturing companies to develop. Among those companies there is one in my riding by the name of Jambette, which manufactures playground equipment. Some of their products are found in early childhood centres, where children go to play. They make quality products but they need investors. In order for these businesses to have access to a capital market, favourable conditions have to be created, and that is why Advantage Canada was created, as a long term economic plan. We also want to ensure that the financial institutions funding the companies in need are innovative and competitive and have a flexible regulatory framework based on recognized principles. Canada wants to ensure that these financial enterprises continue to respond to the need for growth in an increasingly stringent competitive context. This is the reason behind the plan introduced in the 2007 budget for “Creating a Canadian Advantage in Global Capital Markets”, which I invite my colleagues to read. Perhaps even if they read it thoroughly they will decide not to change the contents of their motion today.
This plan for capital markets is designed to achieve increased protection and income for investors, better jobs, more investment and prosperity. There are four elements to it.
The first is to modernize the regulatory system in order to make it easier for a company in Burlington or Bellechasse to knock on one door and be able to expand into the entire Canadian market, with the cooperation of the provinces. It therefore takes into consideration the particular composition of capital markets in Canada, which are comprised of both international companies and small and medium issuers, that is, small businesses. This is why creating a common regulatory body is so advantageous. It facilitates the passage of proportional and principle-based regulations.
The second reason we think our 2007 budget contained an excellent initiative is that we want to protect Canadians' investments. We kept in mind what had happened with Norbourg and the investors who had been left high and dry. These people had trusted the financial institutions and entrusted them with their life's savings. Overnight they found themselves penniless because of those investments. We must make sure our legislation is strictly adhered to and we must attack white-collar crime.
The third component is to increase investment opportunities. I could go on for some time about all the initiatives we are undertaking to ensure that our financial system is indeed highly competitive. This is why we struck a third-party expert panel on securities regulation to provide us with advice. We already have examples of the progress we have made in the past year.
I would point out in closing that we are the only G-7 country that does not have a common regulatory agency. If the economy of Quebec and the manufacturers of Quebec are to have access to capital and to expansion opportunities, it is important for them to have the right tools. That is what we are doing on this side of the House.
:
Mr. Speaker, it is my pleasure today to stand in response to the opposition motion that is before us on the idea of creating a common securities regulator.
I want to thank my colleague from for sharing his time. My brief experience with him over the last couple of years has demonstrated that he has been very conscientious and doing a fabulous job for his constituents.
While the issue of improving Canada's securities regulatory framework may seem a distant concern for most Canadians, the issue impacts more people than most would likely imagine.
Whether we realize it or not, Canada is a country of investors. From RRSPs to mutual funds, to registered retirement plans or the new proposed tax-free savings accounts, Canadians have been increasingly turning to the markets to build their nest eggs for their financial future and are counting on it to do so.
Largely because of that, the importance of ensuring Canada has the best possible securities regulatory framework has never been more important. Furthermore, this is a concern that is breaking across the stereotypical socio-economic groups one would associate with it.
As a major national labour organization, the National Union of Public and General Employees recently pointed out:
Workers have a huge stake in the integrity of the country's financial system for one basic reason. They have untold billions invested in pension funds, and billions more in RRSPs. Their retirement depends on keeping the system honest.
However, it is clear that Canada does not have the best possible securities regulatory framework and that their exists room for significant improvement.
Unlike most developed countries, Canada lacks a federal securities regulatory body. Rather, it is administered individually in each of the 13 provinces and territories, each with their own separate laws, agencies and commissions.
The current framework of 13 different sets of laws administered by 13 different agencies or commissions has naturally evoked criticism throughout the years.
In an increasingly globalized and competitive world, Canada's system is clearly out of step internationally. This fact is not lost on Canadian business leaders. In June 2007 the Financial Post polled 80% who overwhelmingly indicated our system of multiple provincial securities regulators is harming the economy and that the situation needed urgent remedy.
A representative of that viewpoint is Ian Russell, president of the Investment Industry Association of Canada. He has noted that Canada's current fragmented framework with multiple securities administrators and commissions is clearly not favourable to attracting investment. He said, “Foreigners just find the construct a deterrent. A negative. And there's very much an awareness of that”.
Little wonder that the all-party House of Commons finance committee made its first recommendation in its 2008 pre-budget consultation report for the federal government to take priority action to encourage provinces and territories to reach an agreement about a common securities regulator. As a member of the finance committee, I can clearly indicate that it was a priority for the committee.
I note that the bipartisan cooperation witnessed at the finance committee on this matter was not an isolated incident. Time after time the major relevant political parties in Canada have agreed on the need for an improved securities regulatory framework.
For instance, the previous Liberal finance minister, the current member for , also understood the urgent need for improvement and reform. During his short-lived tenure as finance minister, he strongly advocated that Canada “take a very serious look at the proposal for a single securities regulatory”, because the issue “just cannot be left to wither away. It is far too important. We need to substantially improve our system in Canada”.
Similarly, the former NDP finance critic, the member for , openly admitted that she was convinced of the need for a national securities regulator as opposed to a piecemeal provincial approach. She noted at the time, “Canada does not seem to have the tool box necessary to deal with corporate fraud”.
Accordingly, international voices have repeatedly argued that Canada's system at home must be improved. For instance, the Organisation for Economic Co-operation and Development, OECD, in its 2006 survey of Canada stated, “Securities regulation is currently a provincial responsibility, but the presence of multiple regulators has resulted in inadequate enforcement and inconsistent investor protection and adds to the cost of raising funds”.
More recently, Canada became the first G-7 country to undertake the financial sector assessment program update, which provides International Monetary Fund member countries with comprehensive reviews of the stability of their national financial systems. The assessment also arranges the country's implementation of a range of regulatory standards and codes.
While the IMF characterized the Canadian financial sector as among the world's most highly developed and well managed, it noted that in Canada, “the institutions, markets, infrastructure, safety nets and oversight arrangements that comprise the system are sophisticated, and include a full range of financial intermediaries”. However, the report also concludes that there would be an advantage in moving toward a common securities regulator. In particular it would allow policy development to be streamlined to reduce compliance costs and improve enforcement.
The IMF report also notes that although the passport system of securities regulation will further rationalize the regulatory system for its participants, it will not address the inefficiencies related to costs, delayed policy development and fragmented enforcement. The report states that the participants will still be required to pay fees to the regulatory authorities of all the provinces where they raise capital. Policy development will continue to require approval from 13 jurisdictions. The passport system is not designed to address the limited enforcement authority of individual provincial regulators.
Let us examine in detail the policy development under the current system. The report notes, “the process of adoption of national instruments is protracted, since national instruments need to be individually adopted by each province. Depending on the jurisdiction, ministerial approval may also be needed. In addition, while provinces are committed to harmonizing their regulatory framework, they retain full authority to adopt a local standard”.
Let us also examine the detail of the costs imposed by the current system.
The report notes that “a system of multiple regulators entails additional costs for market participants, including additional direct costs, since participants have to pay fees to all the regulatory authorities of the provinces and territories where they want to raise capital and to provide services; there are also compliance costs and opportunity costs caused by longer review procedures. In addition, there appears to be room for efficiency savings at the regulatory level”.
The report adds that a single regulator “appears to be better positioned to address these shortcomings. There are different alternatives for a single regulator, including the 'common regulator'. A single regulator would probably reduce compliance costs for market participants, since there would be only a single system of fees. It would streamline policy development, since decisions would be taken by a single body, and therefore would allow Canada to react more quickly to local and global developments. A single regulator would have enforcement authority in the whole country, and therefore would be in a better position to eliminate the inefficiencies created by the limited enforcement authority of individual provincial regulators. In addition, the existence of a single regulatory authority responsible for administrative enforcement would help to simplify coordination with other enforcement agencies”.
These are some of the reasons that our government is committed to developing the Canadian advantage in global markets and addressing the issues raised by the IMF.
In my riding of , there are a number of small and medium size companies. Their opportunity to grow and prosper is limited by their ability to raise capital and by the regulatory framework in this country. Having to register and repeat the work over again in every province and territory hampers their growth and hampers the economic development of this country.
:
Mr. Speaker, I am pleased to speak today in the House about the Bloc Québécois motion. I would like to indicate right away that I will be sharing my time with the member for .
To ensure that those listening to our debate fully understand every viewpoint expressed here, we should remind them of the nature of the motion. They should realize that there is a major difference between what the Conservatives and the Liberals are arguing for today and what citizens really want, especially those knowledgeable about and directly involved in this debate. The motion states:
That, in the opinion of the House, the government should immediately abandon the idea of creating a common securities regulator, since securities regulations fall under the legislative jurisdiction of Quebec and the provinces and because this initiative is unanimously condemned in Quebec.
When Conservative members rise in this House claiming to defend the interests of Quebec, they are working against the interests of Quebec as expressed by Quebec leaders and advocates in this regard. I will come back to that a little later.
This debate has gone on for over 40 years, and the Government of Canada makes attempts. The jurisdiction is Quebec's and the provinces' according to the Canadian Constitution of 1867. As I was saying earlier, the National Assembly of Quebec unanimously opposes the creation of a single securities regulator. The creation of such a body would threaten the survival of Montreal's trading activities and would promote the centralization of financial markets in Toronto. This is why opinion leaders in Quebec unanimously oppose the federal government's project. To oppose that is to oppose the interests expressed by Quebec and its leaders.
The World Bank and the OECD also note that the current system works well and is efficient. It is the one provided for by the current Canadian Constitution. It is under the authority of the provinces and Quebec. The passport mechanism makes it possible for one province to benefit from what is done in another and from the expertise and commitments of another province in securities transactions.
A number of speakers have said that the arguments of the Conservatives and Liberals, primarily to ensure we are competitive on international markets, were perhaps myth. As my colleagues pointed out earlier, the system works at the moment. The opposite would throw a wrench in the works. In this regard, centralization, the paternalistic approach of the federal government, would weigh the system down and take away the flexibility by which provincial expertise in different areas is available. We will see this later on.
Quebec's expertise is not just remedial in the matter of securities embezzlement, for example. It is not just a matter of getting the securities system to work, it is also a matter of intervening in the event of embezzlement, as occurred in Quebec. Preventive measures must be in place as well. This expertise belongs to Quebec alone. Other provinces draw on it. It proved effective just recently, as we saw, in the Norbourg affair.
There, as elsewhere, people sometimes manage to get round the system and abuse the power given them through the position they occupy. We saw this with Mr. Lacroix. We saw too that the system, when it operates as intended, is effective. The man is serving a 12 year sentence. I do not want to get into the ins and outs of this business, but members can see that the system works well.
People are trying to find similar examples in Canada, and despite big scandals, there is no sign that the proposed mechanism would address misconduct. The example has been given of centralized authorities, such as in the United States or France. My colleague from spoke of the United States. There was Enron, and other cases. Fraud still occurred. In France, a single person, a financial trader managed to misappropriate billions of dollars. The individual will no doubt stand trial. No system is infallible. The centralized system being presented to us as infallible and competitive on the international market is rubbish and will not stand up.
Let us look at what is working. What does work, and has been recognized by major international organizations like the OECD and the World Bank, is an efficient mechanism that performs well. Why change it? That is the whole entire point. Why indeed, if not to centralize in order to dominate in that area as well, limit the freedom to act, innovate and create in the field of financial products, and make sure that a financial centre outside Quebec is responsible for the overall management? The pussyfooting never ends.
When I hear our Conservative colleagues from Quebec make remarks like the one the member for made earlier, I think it is shameful. I find it embarrassing. Eleven Conservative members of this House claim to hold the truth and know the way ahead based on the public opinion in Quebec. I remind the House that the Government of Quebec, the National Assembly, the major stakeholders and analysts in Quebec all say that it is not a good thing. Are they looking after the best interest of Quebec? No. I would like to repeat something the member for and said. He said that, in 1991, he voted a certain way as a member representing Quebec in Ottawa and that, now, he was representing Ottawa in Quebec. That is almost word for word what he said. That is a whole different ball game. It means making different choices and having different values. In addition, it is far from certain that the other provinces would appreciate Toronto controlling the entire management of securities across the country.
I want to recall briefly the AMF's mandate. Quebec's Autorité des marchés financiers favours preventive management.
It has to assist financial institutions, look after them, supervise financial activities and ensure that protection and compensation programs are in place. These are all components that ought to be retained and that can only be managed by an organization of proximity whose expertise can be shared. In fact, that is already the case with the passport system, which is working well and allows this power over anything to do with securities and financial commitments to be exercised within each province while being shared.
:
Mr. Speaker, I would like to congratulate my colleague for his excellent speech. I thank him for sharing his time with me.
I am very pleased to speak on behalf of the Bloc Québécois and to re-read the motion introduced today by my brilliant colleague, our finance critic. The motion states:
That, in the opinion of the House, the government should immediately abandon the idea of creating a common securities regulator, since securities regulations fall under the legislative jurisdiction of Quebec and the provinces and because this initiative is unanimously condemned in Quebec.
I am all particularly proud that there is only one party that can rise in this House and introduce such a motion because there is only one party that defends the interests of Quebeckers every day. It is not the few members of the other parties. It is not the New Democrat member for . It is not the Liberal Party members for or . Even less is it the Conservative members for , , and . Those are not the people who will stand up to defend the interests of Quebeckers. It is the members of the Bloc Québécois. This is even more important because this situation in Quebec has been analyzed and examined. The Quebec National Assembly made a decision to condemn this position.
That is not what I am hearing from the Conservative members. According to them, it is as though Quebec did not know where it was going. I just listened to a Conservative member stand up and tell us that. In their Canadian Constitution, this falls under the jurisdiction of Quebec and the provinces. That is the reality. If there is a problem with the Constitution, they know what they have to do: reopen it and renegotiate it. They will never dare to do that and that is the reality.
Obviously, for more than 40 years, the government has, from time to time, tried to interfere in provincial jurisdictions, especially when it comes to securities. But this has become even more evident since the new took up his duties. It is no secret that he has his eye on the leadership of the Ontario Conservative Party. That is the hard truth. He can afford to criticize the Premier of Ontario. But he is pushing a plan to centralize securities in Ontario. So all the Conservative members who are saying that there is nothing political about this should look at the political interests of the finance minister. It is in his political interest to transfer all the securities to Ontario, because he dreams of becoming the Premier of Ontario. Quebeckers will not be fooled, or at least not the Quebeckers who are able to stand up for what they believe in—the members of the Bloc Québécois in this House. We can see what the finance minister is trying to do.
Obviously, within the jurisdiction of Quebec and the provinces, no one has been fooled by this attack. We will always be ready to stand up and denounce this position. That is why Quebeckers have elected us, to defend their interests and their values. Speaking of values, financial values are among those that Quebeckers want to see protected. Securities fall under the jurisdiction of Quebec and the provinces. In Quebec, the Autorité des marchés financiers or AMF is in charge of regulating financial markets. That works very well.
In a cross-Canada context, we know there is the so-called passport system, which works very well. That is to say that between the provinces, except for Ontario, which has decided to go its own way for political reasons, there is this passport system that allows for a coordinated approach in applying the law. It offers uniform protection for investors. This system enables each securities regulator to develop its own approach and areas of expertise. That makes it possible to have different but complementary approaches to compliance with the regulations by those affected. This different but complementary critical vision, while more onerous, makes it easier to detect and prevent scandals such we have seen in the United States, where these issues are submitted to a centralized authority. It is a benefit for investors. So, the Conservative position is difficult to understand.
Again, Quebec conducted a study and a second assessment, and, on October 16 of last year, the National Assembly decided to condemn this federal government's initiative. All parties, whether sovereignist or federalist, unanimously passed the following motion:
That the National Assembly ask the federal government to abandon its Canada-wide securities commission project.
That is as clear as could be. Quebec has decided to keep its powers in its own jurisdictions, and also its system, which is considered by the international community to be one of the world's most effective.
The fact that Conservative members were lead in that direction by their finance minister, who wants to run Ontario, is their problem. I find it much harder to understand why the Liberals are letting themselves be swayed in that direction. However, considering how they have been behaving in recent weeks, let us remain polite and say that this is just yet another contradiction. However, Bloc Québécois members will not be fooled, and they are going to defend firmly and strongly the position unanimously adopted by Quebec's National Assembly. That is why we tabled this motion. We hope that members from all parties in this House will clearly realize that, under the Canadian Constitution, securities are a provincial jurisdiction, and that they must respect the Constitution. I think they believe in the Constitution, since they patriated it. At the time, Quebec decided not to participate in that event. I hope they will now act in accordance with the Constitution that they wanted, and that they will respect provincial jurisdictions. The position of Quebec's National Assembly could not be clearer. Its motion, which was carried unanimously, asks the Government of Canada to abandon its way of doing things. I am going to read it once again, to ensure that it is clearly understood:
That the National Assembly ask the federal government to abandon its Canada-wide securities commission project.
That motion was passed on October 16, 2007, not 15 or 20 years ago.
I hope my colleagues understand that the members of the National Assembly and the people who helped draft this motion are very familiar with their responsibilities given that this falls in their area of jurisdiction.
Quebec will always be a leader in Canada, at least until we have a country of our own. Once again, we have blazed the trail. Every time that Canada has wanted to push Quebec back, it has found Quebec in its path. And every time that the federalist parties in the House want to push Quebec back, they will find the Bloc Québécois in their path. It is the only party that can stop them from pushing us back. That is what the Conservative Party wants, with the help of the Liberals. It wants to push us back in the securities file. They will find us in their path in Quebec.
This is all the more important in view of the fact that Quebec is unanimous about it, for historical reasons but also to protect its interests. The Autorité des marchés financiers is the final barrier to the disappearance of all stock markets from Montreal after the acquisition of the exchange by Toronto. It was not for no reason at all that the National Assembly came to this conclusion. The reason for blocking this pan-Canadian regulator is simply to protect Quebec’s interests.
The Autorité des marchés financiers has the regulatory authority to require a stock exchange in Montreal. The AMF oversees the exchange and establishes the rules by which it operates, including the percentage of shares held, etc.
The Quebec National Assembly wanted to protect its authority over securities and that is why a unanimous resolution was passed. That is why the only members who can really defend Quebec’s interests rose up today and tabled the motion of our learned colleague, the Bloc financial critic.
Once again we ask the other members to help protect Quebec’s financial authority. If they fail to do so, they will pay the price.
:
Mr. Speaker, I will be splitting my time with the member for .
First, I congratulate the Bloc on this motion. This is an important issue, and having chosen the subject, the Bloc has come armed with good arguments. Although I do not agree with the view taken by the Bloc members on this issue, I have to admit they have done their homework. My only reservation about the Bloc’s position in this regard is that we are hearing the same refrain. No matter what the subject is, no matter what the issue, it is always the same refrain. As many powers as possible have to be given back to Quebec. That is obviously the guiding principle of the party.
I think we have to go back to the principle that Canada is a country. We are not a country so that everybody can withdraw to their corner and tend to their own business. We are a country because we share certain values. Whether the Bloc wants to admit it or not, Canadians who live outside Quebec share the same values as Quebeckers with the Quebec people, the Quebec nation, as some are fond of repeating. That is why we work together on all kinds of things. We have to go back to that idea. Why are we a country? To share our wealth, and not just our natural resources or our monetary resources through an equalization system. We have to share our ideas and work together, sometimes in the same institution, as the Bloc in fact does. The Bloc works here in this House, shares this place with colleagues from across Canada. We must forge ahead and work together with others in the same system, in the same institution. Because we are hearing the same refrain, we have to ask ourselves a question: does the argument have merit? I am not saying they have not made good arguments and they have not taken the question seriously, but it seems to me that it is always the same refrain.
The same thing can be said of the NDP. In fact it is not entirely the same thing, because it quite often acts contrary to its guiding principles. The NDP is chasing the same votes as the Bloc, so it tries to position itself as the great defender of “decentralization”, like the Bloc. But we know that in the past it was always a very centralist party and it still is on some issues. Seeing the NDP switching tracks like this undermines its credibility somewhat. I would tell my colleagues in the NDP not to chase the same votes as the Bloc, because that will get them nowhere.
Listening to the speeches by the NDP members and the speeches by the Bloc members describing federalists, particularly those in the official opposition, as dedicated centralizers, and even colonizers—I do not know whether I have yet heard the word “imperialist”, but it may come up at some point—I thought I was back in political science class at university in the 1970s. It is not a matter of being a centralizer. The idea of creating an integrated system to regulate securities in Canada is a matter of effectiveness. Our colleagues in the Liberal caucus and the Conservative caucus have explained this.
I was rather disappointed by the 's speech on this. He should have taken the opportunity to sing the praises of a cross Canada system to regulate securities, but instead he took the opportunity to deliver, once again, his miserable budget. He spoke of his savings plan. I do not think the plan will be very effective. It will not channel much capital towards the investment Canada so badly needs. I understand my Bloc colleagues' fears. How can a government that delivered such a washed out, miserable and thin budget set in motion a national securities system? I understand my Bloc colleagues' concern.
One of the main challenges facing Canada's economy is to attract capital. It has always been a problem. The NDP has recognized this in the past. Obviously it has changed its message, because it is targeting the same votes as the Bloc Québécois in Quebec. The NDP has always recognized that it has always been a challenge for Canadian industry to attract capital. And so, in the past, provincial and federal governments have had to get involved. This is why there are more government corporations in Canada than in the United States. The government has to find a way to channel capital. This is a fact of Canada's economic history. We have to compete with the United States. The biggest capitalist economy in the world is not a decentralized federal system like ours, but a highly integrated and truly centralized one. It is very effective for investors. We have to compete with this country, and Wall Street is only a few hundred kilometres from here. We must become more effective on the stock markets and investment markets, or we will once again have a hard time keeping our capital and attracting new. For this reason, we must proceed with the help of experts who are not politicians.
As I said earlier, I am not totally convinced that we can trust the government and this to put the proposed system in place. We must turn to the experts, who will tell us how to design an effective system that will compete with our neighbours, the United States, and respect regional interests in Canada. It seems simple and logical to me.
I would like to address as well an argument raised by the member for . He compared provincial societies that govern the professions, such as medicine, architecture and engineering. That strikes me as fairly obvious, and I am sure that my colleagues recognize the evidence. I do not understand why the NDP has a hard time recognizing it. There are human beings, who are not as mobile as capital. And then there is the national securities—capital—system. Capital travels everywhere fairly easily. This is why greater effectiveness is needed at the national level—to better compete with international capital.
:
Mr. Speaker, I appreciate the opportunity to speak to the motion. At the outset, I am totally against it.
It is my premise that Canada needs to advance its productivity and prosperity agenda. Canada needs an efficient, effective economical securities regulator that meets the needs not only of the companies both large and small operating in our great country, but also, and perhaps more important, meets the needs of investors looking to invest in Canadian companies rather than non-Canadian companies. My premise is the only way this can be done is through a national securities regulator.
From a geographical point of view, Canada is a very large country. From the population point of view, it is an extremely small country. We have 34 million people spread out across a vast geographical area. I think we comprise between 1% and 2% of the world's equity markets. Right now we have at least 10 different regulators. We are the only country in the world wherein we would find this type of a system. It cannot work, and I do not think it will work going forward. It is disjointed and duplicitous.
From personal experience, what happens is a lot of the smaller provinces rely on the rulings of the Ontario Securities Commission. I happen to come from a small province. We have approximately 134,000 people, and this is a good example. Are we expected to have our own securities commission, our own securities regulator, our own rules, laws and policy guidelines to deal with any securities issue that comes across our desk?
Again, any person would realize that it is not workable not only in Prince Edward Island, but in New Brunswick, Nova Scotia, Manitoba and Saskatchewan. It will not and can not work.
Another issue, which has been written about extensively, is the inability of our securities regulators to adequately enforce the existing rules. We have had a number of scandals over the years where investors have lost a lot of money, and no one seems to ever be convicted.
Perhaps the most grievous example is Bre-X. I believe capitalization in that case reached approximately $3 billion. There is more gold in my hand than there was in that mine. Investors from one part of Canada to the other part of Canada were fleeced of large amounts of money, and as far as I am aware nobody was convicted. This repeats itself over and over again.
The only way the country will move forward, so we have a very effective and efficient system of capitalization of our companies, is to have a national regulator. That is what I would like to see.
We have seen it. We are into an era of globalization. We have one in Vancouver, one in Alberta and in Montreal. Again, it is consolidation. However, if we do not take steps to have a national securities regulator in place in Canada, what will happen in the long run? If the present trend continues, companies and investors will not look at any of the Canadian provinces. They will bypass the Canadian provinces and look to the New York Stock Exchange.
A lot of resource-based companies in Canada rely on the capital markets. A lot of investors and pension funds rely on opportunities to invest their money. A lot of people want to invest in Canadian companies. If we have 13 separate regulators with their own 13 separate sets of rules, laws and regulations, that will create a lot of uncertainty. I do not think it can work in the long run.
This is very close to the productivity and prosperity agenda. I believe everything that goes on in the House should be looked at through the lens of whether it would enhance the prosperity and productivity of our country. With a national securities regulator, there is no question that it would.
As an aside, and this is related to other issues that perhaps are not in the motion, we have the whole economic union issue which calls for a national securities regulator, but just as importantly, it also calls for the reduction and hopefully the elimination of interprovincial trade barriers that exist.
In this particular country, we have 13 separate jurisdictions, and as everyone in this House is aware, there are many barriers put up to the trade of goods, the movement of goods and people, and services across interprovincial boundaries. There are many barriers in the interprovincial sense that are causing many problems with our productivity and prosperity.
It is good to see some of the initiatives being taken by the provinces of Alberta and British Columbia. They recognize that. They do have an agreement and hopefully other Canadian provinces will emulate those particular agreements that do exist.
Hopefully, if we look back and we are here in 10 years time, many of those interprovincial barriers will disappear. However, if we have 13 different securities regulators, that in and of itself will be a very serious issue that will be looked at.
As I said previously, Canadians are investing more. This is how people, indirectly through their pension funds, fund their retirements, through RRSPs and other instruments that are available. It is natural that Canadians are looking for Canadian opportunities.
We know the land. We know the companies. We know what resources are out there. We know what ought to work and we know that it might not work, but again, if Canadians do not see that there are proper regulations, laws and policies, they will just move on and they will look of course not only to the New York Stock Exchange but the European stock exchanges, Tokyo, and others.
This relates to a larger discussion on what I call the need for a strong central government. We cannot build a country based upon 10 semi-autonomous jurisdictions with a moat or a firewall around each jurisdiction, each one speaking for itself.
Canada needs and cries out for a strong central government, a government with a pan-Canadian vision, a government that speaks for all people wherever they live, whatever sector they are employed in, and this whole issue of a national securities regulator cries out for that.
I realize there are some jurisdictional issues. I know this is an issue that has been worked on by successive governments of different political stripes. We have not been, as of today's date, successful in our quest for this objective, but I do hope that we move toward that.
I know there are always trifle issues as to where this office is going to be located and where that office is going to be located, what this office does and what that office does, but I am hopeful those issues can be resolved through negotiation.
However, if anyone leaves this debate thinking that this country will benefit through the development and expansion of 13 separate security commissions, with their own laws and regulations, then I submit to this House that they are mistaken.
In conclusion, I say to this House that this motion, in my respectful opinion, does not make a lot of sense. It does not advance the prosperity and productivity agenda of this country. The efficiencies and effectiveness that one would like to see in the system will not be present. I urge everyone to vote against this particular motion.
:
Mr. Speaker, I will be sharing my time with the hon. member for .
There is a good reason why the Bloc Québécois tabled a motion today calling on the government to desist immediately from trying to create a common securities regulator. This is a Quebec and provincial jurisdiction. In addition, this initiative has been universally criticized in Quebec.
When I say that there is a good reason, I mean that this is a fundamental issue for us, directly related to the status of the Quebec nation. The Autorité des marchés financiers is currently responsible for regulating securities in Quebec, and the system is working very well, thanks in particular to the passport system shared with the Canadian provinces except Ontario. This is a fundamental issue for us, therefore, because it is directly related to Quebec’s status as a nation, as recognized by all the parties in the House.
It is hard to imagine how the government could recognize a territory and a group of people and give them a certain status only to insist then on taking away a power they already had, especially as we are talking here about a key power that is vital for managing financial products and services within Quebec.
The Autorité des marchés financiers, which is responsible for managing securities in Quebec, has quite a diverse mission. It provides assistance to consumers of financial products and services and ensures that the financial institutions and other regulated entities of the financial sector comply with the solvency standards applicable to them as well as with the obligations imposed on them by law. It also supervises the activities connected with the distribution of financial products and services, supervises stock market and clearing house activities and monitors the securities market. Finally, it sees to the implementation of protection and compensation programs for consumers of financial products and services, and administers the compensation funds set up by law.
It is not immediately apparent, therefore, how the creation of a common securities market would improve a system that is already working very well. There are no doubts at all on the international level about the competence of the AMF or how well the system is working. As a matter of fact, the OECD’s most recent economic outlook puts Canada in second place when it comes to the regulation of securities.
Earlier, I heard the member for say that duplication does not work, to explain in part his disagreement with the Bloc Québécois' position. He said that duplication does not work and never will. I would point out to him that this is precisely why the Bloc Québécois is fighting for sovereignty in Quebec: duplication will indeed never work.
I would add that, in a report on global financial markets, the World Bank considered Canada as a leader in securities trading. This means that, at present, the securities commissions from every province and Quebec are allowed to make themselves heard at the International Organization of Securities Commissions. Given that the Canadian Constitution states that securities fall under the jurisdiction of the provinces, individual jurisdictions can legitimately represent themselves at the IOSCO without going through an intermediary. Quebec has to continue to enjoy this voice it currently has on the world stage.
In February, the government announced that an expert panel would be appointed to draft model legislation to establish a single securities commission.
The Conservative government's intention to create a single Canada-wide securities commission has been confirmed. The Conservatives are prepared to overstep Quebec's jurisdictions and we think that is unacceptable. What is more, how can we accept this intention when we know there has been consensus for a long time and there still is consensus in Quebec against this truly centralist idea of the .
Following a motion tabled by Pauline Marois, leader of the Parti Québécois in the National Assembly of Quebec, the National Assembly unanimously passed a motion asking the federal government to abandon its Canada-wide securities commission project.
On October 2, 2007, Monique Jérôme-Forget, Quebec's finance minister, said that the 's proposal would drive up costs since this plan adds another layer of bureaucracy. We have enough bureaucracy, but they want to add more.
The Quebec federation of chambers of commerce supports the position of Quebec's finance minister and that of the Bloc Québécois. On February 28, 2008, Monique Jérôme-Forget sent a letter to the on the creation of this expert panel. In my opinion, this letter sums up quite well the position of Quebeckers and the consensus in Quebec I was talking about earlier.
Ms. Jérôme-Forget said the following to the :
I have noted the appointment of your expert panel charged with making suggestions and recommendations—
First of all, I reiterate that the existing regulatory system in Canada works well and satisfies both the needs of pan-Canadian participants and the interests of the various regions. Accordingly, I will continue to oppose the implementation of any model leading to the concentration of market oversight responsibilities in the hands of a common or single regulator, regardless of how you call it.
She also said that the passport system works quite well. In closing, she also said the following about the expert panel mentioned and included in the budget bill:
—I note that you have ignored the proposals made to you by the Provincial-Territorial Council of Ministers of Securities Regulation.
I will close by saying that, indeed, it does not make sense to go down this path.