Mr. Ted Menzies (Parliamentary Secretary to the Minister of Finance, CPC):
Mr. Speaker, I appreciate the opportunity to respond to today's motion, if only to once again deconstruct the Bloc's misguided opposition to our efforts to improve market regulation.
Reading the motion, I am left with the conclusion that the Bloc is blissfully unaware of the global economic crisis and has no clue what must be done to ensure that Canada's financial system continues to rank as the world's best. Given the synchronized global recession, our government believes that we must modernize our securities regulatory framework to protect our economy and the jobs that it creates. We believe that this is a priority, especially during these difficult economic times.
Unlike the Bloc, we have a very good understanding of economic issues. I remind the House of the troubling words of Caroline St-Hilaire, the prominent former Bloc MP from Longueuil—Pierre-Boucher, who resigned her seat in the last Parliament. She said:
|| The economy is constantly a black sheep for [the Bloc]. We are profoundly uncomfortable when it comes to discussing the economy.
Canada's financial system has shown exceptional stability throughout this crisis and has been a global benchmark for best banking practices. We are the new gold standard thanks to consecutive governments. Our system has recently been rated the soundest in the world by the World Economic Forum. President Barack Obama has heralded it. He noted:
||--in the midst of this enormous economic crisis, I think Canada has shown itself to be a pretty good manager of the financial system in the economy--
However, the current financial and economic turmoil has highlighted a clear deficiency in the Canadian framework of securities regulation. Canada's security regulation framework urgently needs reform for several reasons. Financial activity is now global and Canada's system must be prepared to regulate the Canadian markets nationally while cooperating with foreign regulators. Canada must also be in a position to promote its interests in the setting of international regulatory standards.
As a recent Toronto Star editorial noted:
|| Given today's global financial crisis, a national securities regulator may just be an idea whose time has finally arrived in Canada.
A national securities regulator would be in the best position to ensure consistent regulatory quality across Canada and to represent our interests in bilateral and multilateral negotiations on financial standards. Canada deserves to have the ability to more effectively coordinate its actions with that of the international community.
Recently, this point was emphasized at the House of Commons finance committee, of which I am a member. The Investment Counsel Association of Canada testified:
|| The problem with the Canadian securities regime and why we stand out...is that there hasn't been enough enforcement...it's harder to coordinate when you have 13 different groups and national firms.
Canada is the only industrialized country without a national securities regulator. The current system is cumbersome and fragmented, something even the Liberal member for Wascana, when he was ever so briefly serving as finance minister, quickly realized. He publicly stated that Canada's regulatory framework was “largely fragmented and certainly less sophisticated than that in virtually every other country in the world”.
Indeed, due to its fragmented nature and the need to coordinate decisions across the 13 jurisdictions, it is difficult for Canadian securities regulators to react quickly and decisively to capital market crises. When countries around the world restricted the short selling of certain financial stock as a temporary stability measure during last fall's financial meltdown, Canada's response lagged behind. It is unsettling to witness a coordinated response from countries while there was no coordinated response from within Canada.
Our system of provincial mandates is not congruent with the national response required to address capital market events that are increasingly national or global in scope. It is highly unlikely that multiple securities regulators within Canada will be able to work effectively as part of a national risk management team with its global partners in a timely and decisive manner.
Without question, this will have a detrimental effect on the integrity of Canada's capital markets.
As an editorial in Canadian Business magazine noted:
|| When it's wrong, it's wrong. That is the only way to describe Canada's patchwork system of provincial securities regulators... There is nothing good about the status quo. Standing out on the world stage can be a good thing, but not when a nation stands out for having 13 securities acts and securities regulators.
Our Conservative government believes that we must act now more than ever to modernize our market regulatory framework to both protect our economy and allow Canada to quickly and decisively react to market events. Since 2006 our Conservative government has been working aggressively to make that happen.
This is not about Bay Street at the end of the day. It is about Main Street.
We are an investing country. Canadian workers, families and seniors invest in RRSPs, tax-free savings accounts, stocks, mutual funds, or are covered under pension plans. These nest eggs represent Canadians' financial future. These nest eggs that represent so much to Canadians are becoming increasingly complex. Canadians deserve the strongest possible regulatory protection for those nest eggs for the future. That is their family's future and their children's future.
That is equally important for Canadians regardless of where they live. It is important in Quebec. It is important in Alberta. It is important in Ontario. It is important right across this wonderful country, and that is the point.
Some have suggested the passport system is the answer, not a national regulator. We respectfully and strongly disagree.
With the passport system, Canada still has 13 securities regulators with 13 sets of laws and 13 sets of fees. What is more, the passport system lacks national co-ordination of enforcement activities, making it difficult to maximize results for this critical part of the system. This is not only inefficient, but it also means some investors and some provinces are better protected than others.
I would suggest that this is in itself inconsistent with the Canadian value of fairness. I would point to the Canada Health Act. I would draw the attention of my colleagues in the House to our commitment to equalization.
The passport system does not meet the longstanding goal of providing Canadians equality regardless of the province in which they reside.
As the Canadian Bankers Association points out:
|| The passport system is only a second-best solution. All of the same infrastructure costs and fees of the current fragmented regulatory system remain in place, entrenching a potentially confusing and inefficient enforcement mechanism. A Vancouver Sun editorial echoes that sentiment noting that, “The passport system is a poor second-best to a national regulator”.
Canada and its economy deserve better than second-best, especially now. The stakes are too high and the risks are too great to accept anything less.
The purpose in creating a national securities regulator is not to create another bloated bureaucracy in Ottawa, but to work with and for our provincial partners to make Canadian markets work better and move with more confidence.
Why is that important? Better markets will allow more companies to seek more investors, allowing more companies to create more jobs for more Canadians. If the current global economic crisis has taught us anything, it has highlighted how important healthy capital markets and effective regulation are to our prosperity.
A Canadian securities regulator with a clear financial stability mandate would help provide national accountability, reduce overlap and duplication, strengthen enforcement, and better serve the needs of investors. The Bloc does not get that, and that is too bad.
We think Canada deserves the best and we are going to make that happen. That is why we are introducing legislation based on recommendations of the Hockin expert panel on securities regulation in Canada. That is why we are working in collaboration with the provinces and territories as we move forward on this important initiative.
The 2009 Budget Implementation Act, already adopted this past March, provides the legal authority for the establishment of an office which will lead the transition to a Canadian securities regulator and the development of an implementation plan.
The Bloc should also be aware that support for a national securities regulator exists within Quebec. As the Montreal Gazette so aptly put it just this past January:
|| The federal government should remain on course and move ahead forcefully to get a national securities regulator up and running.
|| It's absurd, in an era of unprecedented anxiety about all things financial, that 13 different agencies, one in each province and territory, regulate the trading of stocks and bonds and the like in Canada. Around the world there's a serious move afoot to monitor and control companies in this industry in a coordinated international fashion. Yet in Canada, each province still sets - and enforces, more or less - its own rules.
Stephen Jarislowsky, the founder of Montreal investment management firm Jarislowsky, Fraser Limited, said, “A national regulator would be an excellent thing”.
To recap, 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. While Canada's financial system has been judged as the soundest in the world, our system of 13 regulators is cumbersome and fragmented. It lacks the proper tools of enforcement.
The benefits of having a Canadian securities regulator in Canada are obvious and accepted, including contributing to the financial stability of Canada's financial sector, providing clearer accountability and more responsive decision making in a rapidly evolving capital market, strengthening Canada's capacity to work with international partners to improve the efficiency of global capital markets for the benefit of Canadian investors and businesses, as well as strengthening enforcement and the fight against white collar crime, and also providing Canadian retailers with wider access to investment products, and making it easier and less costly for Canadian entrepreneurs and businesses to access money from investors across Canada and around the world.
Contrary to the Bloc's assertion, a national securities regulator is not an intrusion of any kind. It is a voluntary initiative. As stated in Canada's economic action plan, our Conservative government has pledged to work with willing partners to establish a Canadian securities regulator that respects constitutional jurisdiction, regional interests and expertise. All provinces and territories are invited to participate with us. Already a critical mass of provinces and territories, including British Columbia and Ontario, have indicated their willingness to participate in the establishment of a Canadian securities regulator.
This is about co-operation, not about jurisdiction. It is about establishing a Canadian securities regulator that will provide clearer national accountability, reduce overlap and duplication, strengthen enforcement, better serve the needs of investors and contribute to the stability of Canada's financial sector.
We owe it to Canadians to put in place a system that better protects their savings. What is more, the evidence suggests that for the most part the political will is present to accomplish this landmark achievement in this Parliament.
The Liberal Party of Canada has long supported the move to a national regulator, especially prominent Liberals such as the current finance spokesperson, the member for Markham—Unionville, as well as the member for Scarborough—Guildwood, who, by the way, was the last Liberal parliamentary secretary to the minister of finance, as well as the member for Wascana, who was the last Liberal finance minister. Indeed, let me quote the member for Scarborough--Guildwood who remarked in this chamber only a few months ago:
|| We have 13 separate regulators in 13 separate jurisdictions doing, Lord knows, what all.... We think there should be a national securities regulator. The measure provided by the government is a sensible approach to what is a fractured system.... [T]his is a step in the right direction.
This is also an issue upon which even the NDP should be in agreement. We might think that such support would be a given seeing as we have heard strong support from unions like the Canadian Labour Congress, the National Union of Public and General Employees and CUPE.
The NDP caucus chair and the former NDP finance critic, the member for Winnipeg North, called this a worthwhile goal. Even the NDP leader just this past January in a speech to the Toronto Board of Trade said that he would like to see us moving toward national securities regulation.
However, it appears the member for Outremont, perhaps in an attempt to undercut the current NDP leader, has battled his own party and is attempting to shift that party's position. It appears that he wants to be in lockstep with the Bloc and advocates weaker protection for Canadian investors through maintaining our current patchwork approach. I would like to draw the attention of the member for Outremont and his NDP colleagues to the voices of organized labour in this country, like the National Union of Public and General Employees, which recently pronounced:
|| Canada is the only member of the Group of Seven industrialized nations without a national securities watchdog. It has a dismal reputation at home and abroad in dealing with corporate crimes and wrongdoing.... The issue is important to workers because so many depend on sound financial markets to ensure healthy pension funds.
While speakers may follow after me, this debate is, for all intents and purposes, long over. Canada deserves the best. Canadians will get the best. A national securities regulator will be a reality shortly.
Ms. Diane Bourgeois (Terrebonne—Blainville, BQ):
Mr. Speaker, I will be sharing my time with my colleague from Québec. We are here today to debate the following motion put forward by the Bloc Québécois:
|| That, in the opinion of the House, securities regulation falls under the exclusive jurisdiction of Quebec and the provinces and that, therefore, the federal government should reject, once and for all, the idea of creating a single securities regulator for all of Canada, thereby respecting the unanimous will of the National Assembly of Quebec.
This is not the first time we have discussed the subject of a single securities regulator in the House, as proposed by the Government of Canada. We have been discussing the subject for more than 40 years. During that period, Canada has been trying to create a single set of regulations and a single securities commission. We know very well that the Conservative government is taking the offensive by trying to establish it now. But in 2003 the Liberals were already thinking about it. They put together a panel of experts to study the idea of a single securities regulator in Canada. So, to begin with, it is a Conservative wish and also a Liberal wish. It is extremely important not to forget this element in the debate today.
Ontario never had its own securities regulatory system. It was always the only province that did not have one, while all the other Canadian provinces had provincial securities regulations. So, in 2005, the Ontario government commissioned a panel of experts to look at the benefits of a single securities system. Of course, the report presented by this panel supported Ontario's arguments in favour of a single securities commission.
The 2006 federal budget revisited the idea. The then Minister of Finance announced that the government would work with the provinces and territories to set up a common securities regulator. He reaffirmed that position in November 2006, in his economic update, and also in the 2007 budget. Following a meeting of ministers responsible for securities, the Minister of Finance announced plans to set up a working group which, in 2007, would review the benefits of a single Canadian securities regulator in global capital markets.
However, in September 2007, the panel's mandate was changed so that it would focus on how to set up a single regulatory agency, instead of looking at how effective the current system is. In a sense, we were had. The Conservatives changed the panel's mandate. They quietly did their thing and opened doors. We watched them while believing in this government, in justice and in the government's integrity.
On February 21, 2008, the Minister of Finance confirmed his intention to change the panel's mandate so that it would focus on drafting model legislation to create a single securities commission. The 2008 budget confirmed the Conservative government's intention to set up a single securities commission.
Meanwhile, the Quebec National Assembly, including all its members and ministers, unanimously condemned this federal government initiative and passed a motion to that effect, which read as follows:
|| That the [National] Assembly ask the federal government to abandon its Canada-wide securities commission project.
I should point out that, under the Constitution of 1867, provinces have authority over securities. If the current government decides to set up a single securities commission, it is quite simply interfering with the Constitution. It is violating it and changing it for its own benefit.
The Conservative government ignored the motion unanimously passed by the Quebec National Assembly, and, in his November 2008 economic and financial update, the federal Minister of Finance reiterated his intention to establish a single securities commission.
Following that, in January 2009, the National Assembly passed a second motion asking the federal government to give up the idea of establishing a single securities commission. The National Assembly's motion read as follows:
|| That the National Assembly reiterate its firm opposition to the Canada-wide securities commission project.
Finally, the minister, always under the radar, earmarked $150 million to implement his national commission project, despite the Constitution and the jurisdictions of Quebec and the provinces.
The 2009 budget implementation bill, introduced by the Conservatives and supported—I hasten to add—by the Liberals, releases the funding needed to implement this single regulator.
So that everyone knows what we are talking about, securities are negotiable instruments. They can be listed on the stock exchange. They are two main categories: stocks and bonds. There are some others as well, such as investment certificates and share purchase warrants. Securities trading in Quebec is currently regulated by Quebec itself. The other provinces regulate their own trading. In Quebec, the securities business is regulated by the Autorité des marchés financiers. Quebec and the other provinces have to deal with one another. Stocks and bonds are traded through a passport system.
The parliamentary secretary told us a little while ago that this system does not work, but that is not true, it works very well. The World Bank and the OECD have even congratulated us on it. So there is the Autorité des marchés financiers in Quebec which enforces the rules governing the way companies issue shares or bonds.
Earlier, I heard an hon. member, who is probably not very familiar with the subject, ask a question about commercial paper. If we had had a national securities regulator, she wondered, would we have been able to stop the commercial paper fiasco. No, because it happened in the United States or elsewhere in the world and then here. A single securities commission in Canada would not have been able to prevent it.
I want to say as well that the Autorité des marchés financiers has a voice on the international scene. That must be protected as well. Quebec can negotiate with other countries on the international level. If a single securities commission is established, not only will Quebec no longer be able to manage its money in the way it wants, but the federal government will also interfere in an area of Quebec jurisdiction and silence its voice on the international scene.
The Liberal and Conservative members from Quebec are going to have to think long and hard about that. They are clipping Quebec’s wings. Is that really what they want? It is plain as day.
I think they just want to put Quebec down. They do not want it to have a voice any more on the international stage.
Ms. Christiane Gagnon (Québec, BQ):
Mr. Speaker, the Bloc Québécois motion put forward today is meant to highlight a very important issue that will have consequences for the Autorité des marchés financiers in Quebec and for its survival.
I have listened to the speeches by the various Conservative Party members who have spoken. They do not seem to understand the impact that a measure like this will have in Quebec and in the other provinces. An NDP member spoke a few moments ago about Manitoba, which has its own regulations for the securities market.
Clearly this debate calls for a response by both the Liberals and the Conservatives. This is not the first time the Liberals have tried to create a single, Canada-wide securities regulator, and the Conservatives have taken up that cause. It is often said that when it comes to certain issues affecting Quebec, the Liberals and Conservatives are six of one and half a dozen of the other, and they want to centralize. The envelope, or the packaging, may be a little different.
The Conservative Party packaging consists of saying that it understands Quebec and recognizes the Quebec nation, but at the same time, it does not give Quebec what it would like to have.
As for the Liberals, they want to centralize things as well. They claim to recognize Quebec and its nation, but at the same time, they do not want to give any more to Quebec and do not want to give preferential treatment. But we do not want special treatment; we want to be respected, and we want to ensure that the consensus of the members at Quebec's National Assembly is respected.
The Bloc Québécois cannot be singled out because it is the only one who is demanding respect for the operations of securities commissions in Quebec, and in the other provinces, it must be said.
It is clear that the Conservatives and the Liberals are all alike, regardless of who is the leader and regardless of the issue in question. Today, we are calling for the government to respect the fact that:
||...securities regulation falls under the exclusive jurisdiction of Quebec and the provinces and that, therefore, the federal government should reject, once and for all, the idea of creating a single securities regulator for all of Canada, thereby respecting the unanimous will of the National Assembly of Quebec.
This goes beyond what is referred to in politics as a major issue.
I want to give a brief history of this issue. The debate over a national securities commission is not a new topic in this House, since it resurfaces from time to time.
In 2003, the Liberals also established a committee of experts to look at the possibility of setting up a single securities commission. In 2006, despite their promises of being more open towards Quebec, as I said earlier, during the January election campaign which resulted in them becoming the government, the Conservatives took up the idea. They said they were committed to working with the provinces and territories. That was during the election. After the election, though, it became a whole other story.
In 2007, the Minister of Finance announced with great fanfare that he was setting up a working group to look at the result, principle and the performance yardsticks that would best frame the regulation of securities and the search for a Canadian advantage in world capital markets.
In its 2008 budget, the Conservative government expressed the same intent again. It did it again so as to create a single national securities commission. From there, a group of experts was mandated by the minister to draft a bill.
We know now that the 2009 budget includes the funds necessary to create a single financial markets authority and the appropriate legislative provisions. Need we point out again that the Liberals seem to support the path taken by the Conservative Minister of Finance?
We also see what this government's empty rhetoric is worth. It says it supports a federalism of openness and wants to respect the provinces. In fact, it is not shy about encroaching on the constitutional jurisdictions of Quebec and the provinces or about opposing the unanimous will of Quebec, which is against the creation of a single national securities commission.
Twice—on October 16, 2007, and January 15, 2008—the Quebec National Assembly passed a motion unanimously expressing its clear opposition to the creation of a Canadian financial markets authority. How clear is that? We are talking about the unanimous will of all parties together, the Liberal Party of Quebec, the ADQ and the Parti Québécois. The sovereignists are not alone in wanting it. What do we have to do to get the Conservative government to honour a unanimous motion of the Quebec National Assembly?
In this issue, the Liberals and the Conservatives are revealing the same centralizing vision, the same could-not-care-less approach to the jurisdictions of Quebec and the provinces, despite their lip service during election campaigns. Clearly, both the Liberals and the Conservatives could not care less about the Constitution of 1867. Like all of the members of the Quebec National Assembly, the people of Quebec oppose the creation of a single securities commission.
We carry today in this House the Quebec consensus, which rests on a number of arguments. We say we are here to defend the interests of Quebec and the consensuses of its National Assembly. We are clearly consistent today. We are defending the same will to protect Quebec's interests.
Regulation of securities is a power that belongs to Quebec and is exclusive to the provinces. That would probably seal the fate of the Autorité des marchés financiers du Québec as well as the securities commissions of the other provinces who sit as members with the right to speak at the International Organization of Securities Commissions. They tell us that, with a single securities commission, the provinces will be entitled to a voice and will be able to make themselves heard. Let me make the link with UNESCO. They said that Quebec would have a place at UNESCO. What we have at UNESCO is not a seat but rather a little folding chair and Quebec has no right to speak on its own behalf. What will happen if Quebec at some point does not agree with the direction a single commission wants to take? They will do what they do at the UNESCO committee on cultural diversity: they will tell Quebec to keep quiet, to sit on its folding chair, and, above all, not to make waves.
So there is cause for concern. We know very well that the Autorité des marchés financiers du Québec now has a voice at the International Organization of Securities Commissions. Each of the provinces has the right to represent itself, without any intermediary, within this organization. Quebec and the provinces must maintain this role that belongs to them at the international level. If the government were honest when it speaks of open federalism, it would understand what that means.
The current system works efficiently and is based on a passport system that works very well. It allows for a coordinated approach to law enforcement and gives uniform protection to investors. They say the provinces have opted for this passport system. I see in a note that Ontario is not party to that agreement. Now they want to create a single securities commission and place it in Ontario. As it happens, that province stands aloof and will be compensated for standing alone for so many years. Meanwhile, our regulatory system is praised around the world. The European Union is taking inspiration from the current model with regard to the passport system under which each province can develop certain priorities and methods of operation. Now, they will no longer be able to work this way.
I would like my colleagues opposite to respond to us. If it works so well, and if people in other parts of the world find the current system in Canada is a good one that works well, why do they want to change what we have?
Mrs. Lise Zarac:
The Canadian Constitution does not say anything specific about such issues as the regulation of securities. It would be imprudent, therefore, to make major changes to the system only to have them challenged before the courts and invalidated.
Voting for this motion means assuming exclusive provincial jurisdiction. Voting against it means assuming federal jurisdiction. The Liberal Party will not assume anything until the Supreme Court has spoken.
Securities legislation in Canada and throughout the world has two main objectives: to protect investors and to ensure that financial markets are efficient, fair and transparent. Regulatory differences between jurisdictions in relation to the disclosure and exchange of information between corporations and investors can distort the markets and increase investor risk—two very undesirable consequences from the standpoint of economic stability and competitiveness.
In general, the agencies that regulate securities oversee four important areas: capital leveraging through the sale of securities, such as private offerings and primary distributions; corporate transparency and the continual disclosure of relevant information to investors; enforcement of the securities regulations and prevention of deceptive or fraudulent behaviour; the qualifications of securities traders; and their good reputation and accreditation.
Alberta, Manitoba and Quebec are currently opposed to a single securities regulator. Ontario and British Columbia, on the other hand, are in favour. In October 2007, the Quebec National Assembly unanimously adopted a motion asking the government to drop its plans for a national securities regulation commission. One of the arguments made by the provinces is that securities are a provincial responsibility under section 92(13) of the Constitution on property and civil rights. The federal government should not get involved.
Under the current regulations, securities in Canada are subject to directives from more than 13 provincial and territorial authorities. This sows confusion and hampers investment in Canadian businesses.
Companies trying to attract capital under the current system find it very expensive to comply with all the provincial regulations. Small businesses are particularly hurt because the fixed costs of compliance are proportionately higher for them. Time is also an important factor in leveraging capital, and the need to comply with a number of provincial regulatory systems delays negotiations. Investors from less populous provinces may be denied particular investments because some companies trade only in the largest provinces. The differences and disparities in the current regulations make implementation difficult. More resources would have to be devoted to it.
In answer to the criticism, all the provinces and territories with the exception of Ontario formed the Canadian Securities Administrators, a forum that allows the various securities regulators to coordinate and harmonize the regulation system in Canada. The Canadian Securities Administrators have developed a number of initiatives, including a passport system allowing for a single wicket and the ability to participate in all the regional capital markets.
On March 17, 2008, the securities passport system introduced the next stage, as a result of which any prospectus approved in one province would be recognized in all the other provinces, except Ontario. Canadian Securities Administrators also introduced an electronic data system for analysis and research to make information available, and a simplified national registration system for securities traders. According to an Ipsos-Reid survey conducted in 2004, 75% of financial professionals who responded were in favour of a national regulatory agency. In 2006, the Crawford panel commissioned by the Government of Ontario to examine securities regulation recommended the adoption of a common securities regulator.
The government included the creation of a national regulatory agency in the Speech from the Throne of November 19, 2008. At the time, the Minister of Finance proposed an exemption for any provinces that were opposed to the plan, including Quebec.
Last January, the panel led by Mr. Hockin published a 100-page report that called for creation of a decentralized single securities regulator that would allow Canada to protect investors better and be better integrated with international markets.
However, despite some recognition of provincial jurisdiction in the promise to maintain a presence throughout the country, the ministers of finance of Alberta, Manitoba and Quebec immediately opposed the plan. They threatened to sue the federal government if they lost their regulatory authority in this field. British Columbia gave official approval to the proposal.
Our position is clear. Before proceeding with a single Canadian securities commission, we should refer this question to the Supreme Court to determine whether that is constitutionally possible. However, we cannot support this motion today without reservation. It is not certain that such an institution would not better serve the economic interests of investors. That will have to be determined if the Supreme Court decides that the Constitution does permit such a regulatory agency to be established.
I agree with my Bloc Québécois colleague that the Minister of Finance is not going about it in the right way to modernize security regulation and make it more efficient so that our markets are more attractive to investors and issuing corporations. But on what cultural grounds should the regulations for buying and selling shares and bonds be completely different in Quebec? There is no plot by the rest of Canada to deprive Quebec of these decision-making market centres. Indeed, all the evidence suggests that a new securities commission would properly have offices in Montreal to be on the ground, monitoring the actions of the various brokers under its control.
I am not here to support the government’s decision, but simply to say that the government has failed to accept its responsibility to refer this question to the Supreme Court.
Ms. Monique Guay:
Mr. Speaker, I will go about it step by step. When the government decided to order a study aimed at creating a Canada-wide securities regulator, Quebec's National Assembly reacted quite strongly, of course, and a debate ensued. The National Assembly adopted a motion unanimously, with support from every party: the provincial Liberal Party, which is in power, and the Parti Québécois. The motion was moved on October 16, 2007. It reads as follows:
|| That the National Assembly ask the federal government to abandon its Canada-wide securities commission project.
The National Assembly reiterated its opposition on January 15, 2009, through a second unanimous motion requesting that the Assembly reiterate its strong opposition to the plan for a Canada-wide securities commission.
The reason Quebec's National Assembly moved two motions on this subject was to protect Quebec's securities system, which is a perfectly normal and reasonable position. Why create a single securities regulator in Canada when each province already has one? It is mind-boggling. The government is sending the message that it wants to centralize.
Centralization is not desirable. The securities regulation system works very well in Quebec and it works well in other provinces. We heard from different political parties about their concern with securities in their province. We have a centralizing federal government that wants to change everything and create a Canada-wide securities commission in order to control everything: Quebec's economy, other provinces' economies and investments. It is utterly unacceptable.
We will no longer have any powers because all decisions will be made at the federal level. We are getting mixed messages, though. We are told that we are a nation within a united country. Great. But what does that mean for Quebeckers? Absolutely nothing. We are told that we have a seat at UNESCO. That is not a seat. It is a folding chair in the back, and we have to go along with what Canada says. That is precisely what we got: a tiny stool for Quebec behind the Canadian representatives. It is not true that we have a seat at UNESCO with a real right to speak, as will be made clear. There is currently a meeting taking place, and we will be able to see exactly how things go. We will see whether it is true that we have the right to speak for real and if we will be allowed to disagree with the federal government. We will see how it goes over the next few weeks. That is unacceptable.
I would like to read a letter and I think it is important. I realize I have little time left, but it is important because this is a letter from the former finance minister to the current Minister of Finance. This is a very important letter dealing with securities. It states:
|| I have noted the appointment of your expert panel charged with making suggestions and recommendations concerning securities regulation in Canada.
|| 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.
|| 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. [We all have different interests, as she says in her letter.] 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.
|| 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.
|| Given the mixed, to 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.
|| As for the expert panel, 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.
This letter was written by Quebec's former finance minister, who was a Liberal Party minister and a federalist. It is very clear that she is against the idea because it really encroaches on our jurisdiction, our local purchasing, Quebec's economic development and all of the work that is being done already.
Moreover, it is still a question of duplication. Duplications are a drain of energy and cost a lot in time of economic crisis as the one we are going through. It costs a fortune. We need not invest in that right now. We should not waste public money, money that belongs to the ordinary Canadians who are out of work and going through financial hard times, to create a Canada-wide commission. It does not make any sense. It is not a good idea. The provinces and territories already have a system that is respected and admired on the international stage. Our passport system is ranked second in the world and it works well.
We have built an efficient system, but the Conservative government, with its heavy-handed approach, is destroying all the efforts we have invested during many years to establish efficient securities commissions in Quebec and in each of the other provinces and territories. When I consider the position of the Conservative government, I see that, once again, it is ready to overstep its jurisdiction.
I have only one minute left. It is too bad I was interrupted at the beginning of my speech; I would have had more time to speak.
We will fight against the measure. I see that the Liberals have decided not to vote on the motion although, in their time, they wanted to change the system themselves. Maybe thanks to a positive attitude in the House our motion will be adopted. I hope it will be. The NDP will support us. New Democrats members said so earlier. Maybe some Liberals will also support us.
In conclusion, I simply want to say that I spoke with some Liberal members who told me they agree with a buy local policy and a local development policy. This motion is the foundation for local buying. It allows us to manage our issues locally instead of having a Canada-wide commission deciding for us what we should do in our own communities.
Mr. Guy André (Berthier—Maskinongé, BQ):
Mr. Speaker, it is with great interest that I rise here today to speak to the Bloc Québécois opposition motion.
The subject we are debating here today is very important for Quebec, because it denounces the federal government's determination, obsession even, to create a single securities commission, with the support of the Liberals in this House, despite the clear, unanimous opposition of the Quebec National Assembly. I mentioned the Liberals' support because if they do not vote, we only have to do the math to know that there are enough Conservatives to beat the Bloc and the NDP put together. By not voting, the Liberals are voting against the motion and letting the government do whatever it likes when it comes to securities.
The motion moved by the Bloc Québécois calls on the Conservatives and the Liberals to give up, once and for all, the idea of creating a single securities regulator. For some time now the federal government, whether Liberal or Conservative, has wanted to concentrate all of Canada's financial administration activities in Toronto, even though this is a constitutional responsibility that belongs to Quebec. This falls under Quebec's jurisdiction, as clearly stipulated in the Canadian Constitution.
For over 40 years, the idea of Canada having a single securities regulator has come up periodically. I do not understand why, in this time of recession and economic crisis, anyone would want to overhaul a system that works very well. The International Monetary Fund and the OECD have ranked our current securities market as the second best in the world. Why overhaul it? Does the government have nothing better to do in the next few weeks? The isotopes issue, for instance, could certainly be the focus of some debate and does warrant some attention.
Instead, this government is going against the members from Quebec and a unanimous motion in the Quebec National Assembly. All economic players agree: the securities commission falls under Quebec jurisdiction. We do not want to decentralize all our securities to Toronto, which would then have the power to run Quebec businesses. That is at cross purposes with our values as Quebeckers, as well as our financial and economic autonomy. In this time of recession, it is important to control all our economic levers and manage our own securities. That is crucial.
I am convinced that the objective of the federal government's position to meddle in a Quebec jurisdiction is also to limit once again the Quebec government's choices and abilities to take action as well as to weaken its economic power in order to annihilate it. However, Quebec is saying no. On two occasions, Quebec's National Assembly voted against the Conservative government's proposal. The Bloc Québécois will stand firm and ensure that this proposal is not adopted. Luckily, the Bloc Québécois is here. The Conservative and Liberal members representing Quebec will vote against the unanimous motions of Quebec's National Assembly, of the people they represent. That is shameful. Fortunately, the Bloc is here to defend Quebec. That is evident again today.
We should not forget that establishing a single regulator will jeopardize the survival of stock exchange activities in Montreal and foster an even greater concentration of the financial market in Toronto. Do the members from Quebec know what they are doing by voting with their government?
As I mentioned, the federal government's desire to establish a single regulator is nothing new. However, we have always managed to make the government back down on this proposal.
And yet, this desire was very clearly stated in the 2008 budget when the Minister of Finance again repeated that he was determined to introduce a bill to create a single regulator.
To attain this objective, the minister entrusted an expert panel with a very specific mandate. When work began on February 21, 2008, it was very disturbing that the Minister of Finance directed the panel to develop a model common securities act.
Clearly, by moving forward with a bill, the government has decided to go against the unanimous will of the National Assembly, which had unanimously denounced this federal initiative. We have a democracy in Quebec. Three parties were present. The Action démocratique du Québec is not the Parti Québécois. It does not have the same political objectives. The Liberals, who are federalists, are against the Conservative government's proposal for a pan-Canadian securities commission. Therefore, why go forward with it?
As expected, the expert panel recommended the creation of this commission. In addition, its report calls for a mechanism that would allow corporations to bypass laws adopted by the National Assembly of Quebec by authorizing them to work directly with the pan-Canadian organization.
In short, the report itself shows the desire of the Conservatives and the Liberals to impose this single commission, despite the legitimate objections of Quebec.
In response to the stubbornness of federal Conservative and Liberal members—the fact that the Liberals will not vote on this proposal is indicative of a position—the Quebec National Assembly once again restated its opposition on January 15, 2009, just before the 2009 federal budget was tabled, through a second unanimous motion that expressed its opposition to the federal government's approach.
However, when the Conservative government tabled the 2009 budged, in the middle of a crisis, it committed $150 million to implement this Canada-wide commission. We do not have money for the unemployed, we do not have money for the manufacturing or forestry industries, but we have money to invest in a jurisdiction that belongs to the provinces and to Quebec.
In conclusion, I am convinced that the federal government's desire to interfere in one of Quebec's jurisdictions is an attempt to once again limit the Government of Quebec's choices and ability to act. The Bloc Québécois is here to prevent that. We must not forget that the creation of a single regulator would threaten exchange activities. As I already said, the fact that the government wants to do this is nothing new. It is nothing new that a federal government, Liberal or Conservative, would want to centralize all of Canada's financial administration activities in Toronto, when this is one of Quebec's constitutional responsibilities.
For the Liberals and the Conservatives, this simply fulfils the common goal of handing over to the federal government all of the major economic powers, so that the central government has greater latitude to act. The Bloc is against this, and we will not let them do it. Fortunately, the Bloc Québécois is here to represent the interests of Quebeckers, because the Liberal and Conservative members from Quebec will vote in favour of a proposal that goes against the very interests of Quebeckers.
Mr. Steven Blaney (Lévis—Bellechasse, CPC):
Mr. Speaker, what a fine lead-in to my speech. I want to tell you at the outset that I am going to vigorously oppose this motion, which is against Quebec’s best interests. I want to tell you that I have listened to some of the speeches by my colleagues who spoke before me. I invite them to do the same, to listen to me, if they wish. If they want to talk, they can go outside the Chamber.
What struck me in their speeches is that at no time did an opposition member from the Bloc Québécois say what was good for business in Quebec. That is what is behind this motion. They have forgotten where the interests of Quebec businesses lie. The only thing they are thinking about is the Bloc ideology of a Quebec turned inward on itself and a regressive vision of Quebec.
I do not hold with that vision, I believe in an open and generous Quebec, a Quebec that takes its place in the Canadian federation and the world.
I have some names of companies that want to go on the Exchange: I am thinking of Rotobec, IPL, Prevost Car Inc., Exceldor, Côté, Knox, Poulies Maska, companies that need access to a capital market, a stable market. For that, they do business with financial institutions and the big banks. The other financial institutions, cooperative institutions, like the largest Canadian cooperative movement, Desjardins, have rules, and it is our role, as the government, to oversee them.
At the federal level, we have the Office of the Superintendent of Financial Institutions. That regulatory framework produces very good results, to the point that last week the 15th International Economic Forum was held in Montreal, with organizers that included Economic Development Canada, which provided financial support for that major global meeting. What did we see there? We saw the International Monetary Fund recognize that our financial system is one of the soundest on the planet.
Certainly we must not put our head in the sand and rest on our laurels. It is our responsibility to identify weaknesses in our system, to roll up our sleeves and work to improve it. One of the weaknesses in our financial system is that we have a system for securities regulation that is fragmented, that is divided among 13 different agencies.
Although the International Monetary Fund recognizes that we have a very sound financial system, the flaw it identified is our system for securities regulation. In that, it agrees with the large majority of observers, who recognize that the best solution lies in a single regulatory system that applies a single securities law. It must be agreed, we certainly do not set out to create crises, as is often the case with the Bloc, particularly in Ottawa, who love to create crises. That even seems to be one of their formulas for stirring the pot.
One thing that stands out as important, when it comes to creating the securities commission, is that we take a Canada-wide approach that respects jurisdictions and that is done in collaboration with the provinces. This is the complete opposite from what the Bloc Québécois is proposing and from what it has said this afternoon. It is a point of view shared by other provinces. In our 2009 budget, we insisted on the fact that we wanted to work with the provinces and territories on a Canadian securities regulator that respects constitutional jurisdictions. There is a difference between a Canada-wide commission and a federal commission that will respect regional interests and expertise. All the provinces are invited to participate in this transition toward a national securities regulator.
Some provinces have already supported this process. Ontario says that it would be important to improve the competitiveness of Canada's economy, but also, at the other end of the country, British Colombia recognizes how important it is to work together on this project. This province's finance minister, Colin Hansen, was quoted in the Vancouver Sun as saying that British Colombia “believe[s] that the objective of national regulation is the right objective”.
A national securities regulator would help give our companies greater access to a capital market. We hope that over the next few months, other provinces will work with us, will take the Canadian government's offer and will join in on the project, because during this economic recession we must take action that will give our manufacturing companies an advantage and make them more competitive.
As has been said, Alberta, Manitoba and other provinces have stated that a single regulator is not necessary because of the passport model. I am happy to talk about that this afternoon. First, I realize that it is a worthy initiative that has made it possible to reconcile regulatory differences and to harmonize and simplify securities laws. The initiatives are important to increase the efficiency and effectiveness of Canada's regulatory system.
Through these initiatives, the provinces have indicated that they wanted to work together, respecting all jurisdictions, as part of a clear commitment to improve our securities regulatory system.
Even though those initiatives are laudable, they do not go far enough and fast enough. We must take one more step. In fact, with the passport system, which is a move in the right direction, we still have 13 sets of laws, 13 types of legislation and 13 organizations, all for one country.
That does not serve the Canadian market well. It is a well known fact that companies in Quebec, Manitoba and the Maritimes are often small companies and the regulatory inefficiencies hit them relatively harder because the relative costs to access new markets are higher for them. The passport system limits the capacity of small and medium-sized companies to exploit the possibilities of all the financial markets in Canada. Moreover, that structure imposes high costs on them.
In its presentation to the expert panel on securities regulation, the Canadian Bankers Association insisted on that. The association pointed out that if these companies tried to raise capital in 13 jurisdictions instead of just one, the costs associated with regulations would double to 16% of capital for a business that wanted to raise $1 million. A company must therefore spend $160,000 on red tape to raise $1 million. That is the situation now. That is 4% for a company that needs $10 million. That hurts our small manufacturing companies that look for capital in a larger market. That is what we should remember when we analyze legislation adopted here in Ottawa in the interest of Quebec and of all Canadians.
Businesses in other countries do not have the same kind of burden, which puts Quebec companies at a competitive disadvantage on today's world markets. It is here, in Ottawa, that we can take concrete measures to help Quebec companies.
Janet Ecker, president of the Toronto Financial Services Alliance, said that at a time when the entire international financial system is engaged in a race to create co-ordinated, standardized regulatory systems, we cannot even create a national system. She said that if Canada wants to be taken seriously on the international financial stage, it has to have a national system. Our colleagues in the Bloc obviously do not care at all about Canada’s competitiveness on the international scene because they are so busy trying to isolate Quebec by separating it or fomenting political crises.
According to Bloc ideology, the European common market is often seen as a beautiful utopia. In actual fact, the Europeans are trying to harmonize their sovereign countries and lower tariff barriers. We are currently negotiating with them because we want to open our markets. We know that this is what enabled Quebec businesses, under a Conservative government, to access the U.S. market and markets throughout the world. Their pork is exported to Mexico and their aircraft to China, for example. People realize that we need to standardize our ways of doing things, rather than erect barriers. We need to lower the barriers around Quebec, rather than raise them.
What is important is to have a Quebec that is open to the world and able to do business, and that goes through Ottawa, through federal legislation that is suitable, respects the various jurisdictions, and takes Quebec’s interests into account.
What the passport system lacks is a national mechanism to coordinate law enforcement. As a result, it is hard to get maximum benefit from this crucial aspect of the system.
This defect was highlighted by the Royal Bank in its submission to the expert panel. Its representatives stated that, as a result of insufficient resources and the difficulty of co-ordinating investigations among a host of different agencies, compliance with the securities legislation in Canada was perceived as slow and most effective when non-compliant parties declared their violations on their own.
This perception hurts Canada when it comes to the enforcement of the regulations. Trade can easily move to other countries and capital raised there if law enforcement here is perceived as lax.
This is also important for Canada on the national scene. The International Monetary Fund recognized that Canada is one of the engines of the G20 and helped institute the measures that are enabling the global economy to emerge from the crisis. It is important, therefore, for Canada to be able to play a leadership role as well on international financial markets.
According to the Investment Industry Association of Canada, which is a national sectoral association, this failure is costing us some fine opportunities. The IIAC says that our process for approving new products and new rules and market structures is obsolete because it requires a consensus resulting in long delays.
It is important therefore for Canada to be one country with mechanisms to ensure that capital can circulate adequately within it and without barriers to overcome every time a business person wants to access capital from another province.
A Canadian securities regulator would not only increase Canadian markets' competitiveness, but would facilitate the development and marketing of new financial products, and the adjusting to the evolving international situation. And this is precisely the most interesting aspect for Quebec businesses.
Some also claimed that a Canadian securities regulator would be a centralized body that would not take into consideration regional specificities. It is our role as parliamentarians, here in Ottawa, to ensure that this Canada-wide body reflects regional disparities and interests. For example, we can think about investors from the Atlantic region, who do not necessarily want to come to Ottawa, or to Toronto, to do business. In the study that was conducted, the transition office said that the regulator would have a regional specificity. Let me explain.
In its report, the expert panel recommends that regional, provincial and local offices be maintained, and that these offices “would support implementation measures taken locally, would serve as contacts for complaints regarding faulty actions of a regulatory nature, and would provide general services to meet the needs of participants in local and public markets”.
The media reported that those opposed to a Canadian securities regulator claim that it would not take into consideration the specific sectors of each province. It is just the contrary. Indeed, the transition office precisely hopes that the regulator will cooperate with the provinces to establish a Canada-wide market.
The expert panel recommends that local offices be maintained in certain regions of the country to deal with these specialized markets. The report points out that British Columbia could specialize in the mining sector, Alberta in the oil and gas industry, Ontario in the financial service sector, and Quebec in derivative financial instruments.
The Montreal Exchange, which has already developed a specific niche in derivative financial products, immediately comes to mind. We would simply want to concentrate all these activities in Montreal, Quebec, for the whole country. This means that Quebec would manage all financial instruments derived from securities, and we know that there is a huge potential for growth in this area. In other words, Quebec would manage that specific area for the whole country.
As we can see, it is important, in the implementation of this Canada-wide system, to take our rightful place, so that Quebec can fully assume its role and benefit from it.
At first, the staff of regional and local offices should include mostly employees from existing provincial regulators. We must recognize the excellence and skills of those who provide similar services in all the provinces, and particularly in Quebec, and we must keep these regulatory skills and provide uninterrupted regional and local services.
By having decentralized offices with such regional specificities, this system, by its very nature, takes into consideration our country's specificities and can thus become an excellent tool indeed to establish a single system across the country and to allow businesses to have access to a service that is geared to their needs when they go to an office.
As I mentioned, the current recession was triggered by systemic problems in the financial structure. In recent months, Canada and its G20 partners have been working very hard to restore financial stability throughout the world. However, the international community continues to feel the effects of this financial crisis. Canada, like all the other countries, has learned that a systemic risk can come from any part of the financial services sector, and not only from the banking sector. So, we are talking about the financial market.
The Bloc members unfortunately voted against Canada's economic action plan, and they said they were going to vote against the spending estimates on Friday. They would rather go to the polls and hand out pamphlets at the Old Orchard campgrounds and beaches than invest money in getting our economy moving and creating jobs. That is a fact.
Our government's economic action plan included a series of measures to bolster financial stability, including increased powers for the government and the Canada Deposit Insurance Corporation and the creation of an office to facilitate the transition to a Canadian securities regulator for participating provinces and territories. We are therefore making structural investments to eliminate and break down barriers so that Canadian companies can have broader access to more capital.
Bringing all the financial regulation stakeholders together at the same table will improve policy coordination and make Canada's regulatory framework more responsive to global challenges. It will make us better able to identify emerging risks and to work together to mitigate them.
Far from being an intrusion into a provincial jurisdiction—I explained that we are working with respect for jurisdictions and in a way that puts companies first—the creation of a Canadian securities regulator is a giant step for Quebec's and Canada's financial markets and investors. Everything is being done with respect for jurisdictions, regional interests and expertise. This is a concrete example of a Quebec that is developing and playing its role within the Canadian federation in a united Canada.
Mr. Serge Cardin (Sherbrooke, BQ):
Mr. Speaker, I am proud to speak on behalf of the Bloc Québécois. I would like to congratulate all my colleagues who have spoken, all these men and women who are the only ones truly standing up for Quebec in this House.
Today's remarks by the Conservative member for Lévis—Bellechasse and by a number of Liberal members from Quebec who will not even venture to vote on this motion crucial to Quebec are further proof. It is also very important for my hon. colleague from Richmond—Arthabaska and myself to point out that I will be sharing my speaking time with him. I did not want to steal the floor from him and prevent him from speaking on such an important motion.
Let us go over this motion quickly to ensure that the Conservative and Liberal members from Quebec fully appreciate the weight of responsibility associated with voting against this motion. It reads as follows:
|| That, in the opinion of the House, securities regulation falls under the exclusive jurisdiction of Quebec and the provinces and that, therefore, the federal government should reject, once and for all, the idea of creating a single securities regulator for all of Canada, thereby respecting the unanimous will of the National Assembly of Quebec.
As I said earlier, when the National Assembly of Quebec speaks with a single voice, it is 125 Quebec MNAs saying no. They are contending that this is an area which falls under Quebec's jurisdiction and they want to protect the system which has been in place for many years and is working well.
That is why the 49 Bloc members who are here to defend the interests of Quebec are also speaking out against this Canada-wide securities commission.
As I indicated, the National Assembly is unanimous. Securities fall under the jurisdiction of Quebec and the provinces. I also mentioned earlier that two provinces have come out and said that they wanted to keep their own securities regulators. Establishing a common regulator would jeopardize the very survival of trading in Montreal and promote financial market concentration in the Toronto area.
I do not know why the Conservative members, including those from Quebec, continue to say that this is the best thing to do, when the World Bank and the OECD find that the current system works well, that it is efficient and effective. Efficiency and effectiveness do not mean quite the same thing. The Conservative Party is living proof of that. It is not effective and not efficient. Efficiency means doing things well, and effectiveness means doing good things. It does not know how to implement good things and when it does, it is not effective.
Some Conservative members have told us from the start of the day that the Bloc did not understand the economy. History, however, will confirm what I am going to say. For years, the Bloc alone has said how there would be a surplus, how things would react and what the increases in economic development terms would be. If all of the policies proposed by the Bloc Québécois had been implemented, we would not be in this crisis today in Canada and especially in Quebec.
Without pretension and with no offence to the humility of the member for Saint-Maurice—Champlain, our finance critic today, or that of those who preceded him, either Paul Crête, who left this House to represent us in the National Assembly, or Yvon Loubier— they are all competent individuals who know the economy—I would refer to the hon. member for Markham—Unionville. I am sure everyone knows he was the chief economist at the Royal Bank between 1994 and 2000. He was a professor of economics at McGill and at the Université du Québec in Montreal and a professor at Simon Fraser and the University of Manitoba. Since 1976, this kind gentleman has called himself an economist. During all that time, what did he do when he was speaking to students or to heads of business? Did he never say this was a matter of Quebec's jurisdiction? Did he ever wonder if it could be changed by this government? Some have been talking about it in strong terms for 40 years. In 2003, the issue was revived. The Government of Ontario went so far as to do studies in support of its arguments for a single commission.
This afternoon, the hon. member for Markham—Unionville told us there is a legal uncertainty. Our arguments are based on the fact that this is a Quebec jurisdiction and that the system is effective and works well. The hon. member said that there is some constitutional uncertainty over whether or not this jurisdiction belongs to Quebec and the provinces. As a result, the Liberal Party will abstain. That is totally absurd. The Quebec Liberal members are going to abstain. As the old dictum goes, “Silence is consent”. In other words, silence signifies consent to the government’s policy of a single, Canada-wide securities commission. That is contrary to the interests of Quebec and to the responsibilities assigned to it and to all the provinces. It jeopardizes everything. We must face up to this because Ontario’s intentions are clear: it wants only one regulator. It did not participate, however, in the passport system. It is purely in its own interest, therefore, that Ontario wants a single, Canada-wide securities commission in opposition to Quebec and other provinces such as Alberta and Manitoba.
As things currently stand, the securities commissions of Quebec and the provinces can speak before the International Organization of Securities Commissions. The Constitution says that securities are a jurisdiction belonging to Quebec and the provinces, which are therefore all entitled to appear directly before the International Organization of Securities Commissions without any intermediaries. Quebec and the provinces must preserve this right to speak on the international scene. We do not want it to become like Quebec’s seat at UNESCO. As we said before, it is more like a folding chair or even an ejection seat. If we do not agree with the federal government, we no longer have the right to speak.
The Conservative members are solidly in favour of the Canada-wide securities commission. I am talking mainly about Conservatives from Quebec. The Liberal members from Quebec are going to abstain. Some members will vote for Quebec’s economic priorities, values and savoir-faire, and some would rather not. As we have already seen, the Montreal stock exchange was sold to Toronto. An English Canadian was made president of the Caisse de dépôt et placement du Québec. There have also been cuts to the not-for-profit organizations with an economic mandate. The Government of Canada is mounting a direct, frontal assault on Quebec’s economic interests. We have to stop it because the situation in Quebec and even in some other Canadian provinces is being seriously undermined.
Mr. André Bellavance (Richmond—Arthabaska, BQ):
Mr. Speaker, I thank my hon. colleague from Sherbrooke for agreeing to share his time with me in the context of this very important issue, one so important that the Bloc Québécois has made it the theme of its opposition day.
This motion has been moved for very specific reasons aimed at ensuring that Quebec's interests are respected. I can list those reasons: the Quebec National Assembly is unanimously opposed to the creation of a Canada-wide securities regulator; securities fall under the jurisdiction of Quebec and the provinces; the creation of a single securities regulator would jeopardize the survival of trading activities in Montreal and would favour the concentration of financial markets in Toronto; and the World Bank and the OECD have reported that the current system works well and is both efficient and effective.
Perhaps we should not be surprised by the Conservatives' decision to go ahead with this despite the unanimous consensus in Quebec, both politically speaking and in terms of the financial markets, concerning their idea to create a single commission. As we know, it is a centralist party. With this, the Conservatives are flouting the will of Quebec.
I am seeing another example of “Ottawa knows best”. I even heard a member from Quebec, the hon. member for Lévis—Bellechasse, who rose a few moments ago in this House to try and justify a single securities commission, even though it goes against everything that is being called for, not only by the Government of Quebec, but by all parties in the Quebec National Assembly and those responsible for Quebec's financial markets. Our Conservative colleagues might be interested to know that other provinces are also completely against a single market and a Canada-wide securities commission.
Some members are rising here today to speak out against the will of Quebec and in favour of a single securities commission. I would prefer to refrain from commenting. The people of those ridings will be the ones to judge the decision made by the Conservative members from Quebec.
The Liberals once tried to do the same thing. In 2005, they brought down a budget that called for a single securities commission. Today, though, I have been quite surprised to hear members from Quebec say that they are going to abstain from voting. They are going to sit on their hands. That is something they did fairly regularly with their former leader, but I am surprised that they are still reluctant to take a stand. This issue clearly comes under Quebec's jurisdiction, and the Government of Quebec and the National Assembly of Quebec do not accept this decision by the Conservative government.
The Liberals just came up with the idea that it is up to the Supreme Court to decide. A specific section of the Constitution Act says that Quebec and the provinces have jurisdiction over this issue. Suddenly, the Liberals want to refer the issue to the Supreme Court, wash their hands of it and avoid making a decision. We should be very worried for Quebec, because these people want to form the next government.
The new Liberal leader is telling his troops not to vote on a decision that could have serious consequences for Quebec. Moreover, this will mean that the Conservative government will be able to go ahead. Only the Bloc Québécois and the NDP have decided to stand up and respect the provinces' jurisdictions.
The Liberals may think they are going to put things off by calling for the issue to be referred to the Supreme Court, but it seems to me that the Liberal leader is going to great lengths to avoid taking a stand. This is going to come back to haunt him, just as it is going to haunt the Conservative members from Quebec. When they travel around their ridings, they will have to face the anger of the people in Quebec.
The Conservatives are clearly going against Quebec's decision. The Liberal position is not as clear-cut, but the result is the same. They do not have the courage to vote, and they are making it possible for the Conservatives to defeat our motion, which reflects the will of the Government of Quebec.
What is at stake here, is respect for the will of the Government of Quebec, the will of the entire National Assembly of Quebec, the Quebec financial sector, the Fédération des Chambres de commerce du Québec, and others. My colleagues mentioned in their speeches that the National Assembly of Quebec had unanimously condemned this federal initiative.
The National Assembly of Quebec unanimously condemned this federal initiative. On October 16, 2007 it passed a motion that stated:
|| That the National Assembly ask the federal government to abandon its Canada-wide securities commission project.
This request was reiterated not so long ago, on January 15, 2009. A motion asked for help in dealing with the impact of the current economic crisis and also stated that the National Assembly reiterated its firm opposition to the proposed Canada-wide securities commission. Twice, not once, all parties in the National Assembly declared that they were opposed to the idea.
The former Quebec finance minister, Monique Jérôme-Forget, vigorously opposed the federal government's proposal. She explained her arguments against this single securities regulator in the October 2, 2007 edition of Le Devoir. I will read a few excerpts. The title of the article was “The Arguments of the Federal Minister of Finance Simply Do Not Cut It”. She named the Minister of Finance but you know that I am unable to do the same here, Mr. Speaker. As for the federal government's arguments with respect to protecting investors, Ms. Jérôme-Forget rejected them outright. She said:
|| A 2006 study by the World Bank and Lex Mundi ranked Canada in third place in terms of protecting investors, while the United States and the United Kingdom ranked seventh and ninth, respectively. In its 2006 report, the OECD also ranked Canada second in securities regulation, ahead of the United States, which was fourth, the United Kingdom, which was fifth, and Australia, which was seventh. With results like that, it is surprising that the federal and Ontario governments continue to disparage Canada's regulatory system both here at home and abroad. That is what I call shooting oneself in the foot.
We have been hearing rather less from her since she resigned, but she never minced words. She told Canada's finance minister to mind his own business and stay out of areas under her jurisdiction. She made no bones about it. That is just part of the article that appeared in Le Devoir.
My colleagues quoted from a letter that Ms. Jérôme-Forget sent to the Minister of Finance. The situation is clearer than clear. According to Ms. Jérôme-Forget, the federal finance minister's position would increase costs because he is proposing a single entity with offices in each province and a head office in Ontario. In other words, he claims that he will cut costs by adding another layer of bureaucracy. That does not make sense.
The Minister of Finance also claims that financing costs are higher in Canada. That is not true. The total average direct cost of a small Canadian issue of between $1 billion and $10 billion U.S. is lower than that of an American issue. It is 15.98% in Canada and 17.99% in the United States. The direct cost for larger issues, those in excess of $100 million U.S., is similar in both countries. That takes care of some of the arguments we have heard from Conservative Party members today.
The 2008 budget brings back bad memories because it confirmed that the Conservative government intended to create a single Canada-wide securities commission. In the 2009 budget, the government went even further by allocating $150 million to set up a committee to implement the recommendations in a report by an expert panel appointed by the Conservatives. Obviously, people on the panel were in favour of the single commission. The 2009 budget implementation bill, which was introduced by the Conservatives and supported by the Liberals, allocated the necessary money and put in place the necessary legislative provisions to create a single authority.
I will conclude on that note. The Conservatives have ignored all of Quebec's demands. For 40 years, the government has been talking about creating a single securities commission, and for 40 years, Quebec has been opposed to the idea. Other provinces are also opposed to it. I am very surprised to see members from Quebec, from all parties—not the Bloc Québécois, of course, because we defend Quebec's position, but Conservative members and Liberal members from Quebec as well—stand up in this House and either speak against Quebec's position or decide to abstain. It is appalling. I take exception to that, and Quebeckers will as well.
Mr. Jim Maloway (Elmwood—Transcona, NDP):
Mr. Speaker, I am pleased to speak to the motion put forward by the Bloc member.
This issue has been around for quite a number of years. It has provoked a lot of debate and emotion on the part of people in the chamber and all across the country.
It is not so much about what the final structure of the proposed organization would be, but more about how the people who would be running it would make decisions that would help people in this country.
For example, Ontario has a big securities regulator. In the last couple of years it has had a grand total of two convictions. However, the regulator in the United States managed to get convictions on 1,000 cases or more over the last couple of years.
It is interesting to note that Conrad Black, who is doing time in a Florida prison--maybe not for long, but he is there now--committed his white collar crimes here in Canada, but it was not the Canadian system that took action against him; it was the American system that took action and put him in prison for the crimes that he committed here in Canada.
If this exercise is all about centralizing the activities of a national securities commission in Ontario as the Bloc member has suggested, if it is all about a few more jobs for Bay Street, and if it is all about saving a few dollars on compliance costs, then we would be better off staying with what we have.
Manitoba has a small securities commission which works very well. There are members in this chamber who know that the system in Manitoba works well. The people on that commission are local and they know what is going on in the local market. If someone complains that somebody is selling securities without registering a prospectus with the securities commission, that activity bubbles up in the smaller jurisdiction and the information gets to the securities commission and it acts.
That is what the system is supposed to accomplish. It is all about protecting the public, making sure that members of the public are not get taken advantage of, that they do not lose money because of people involved in shady practices.
This is not about saving some compliance costs and making it easier for a big company to file one prospectus rather than 13. This is not about creating a few more jobs for some Bay Street people. This is all about having a system in place operated by people who believe in enforcement, people who actually do their jobs. This is not about taking people from industry and putting them into positions of regulatory authority.
We saw what happened recently with Bernard Madoff in the United States. Harry Markopolos delivered the entire case against Bernie Madoff to the U.S. Securities and Exchange Commission and nothing was done. Why? Because the whole commission was run by former salespeople and executives of the very investment companies the commission was supposed to be regulating. That is the real problem.
The public would be better served if we had an effective structure, one that looks out for the public instead of looking out for the businesses it is supposed to regulate.
We have this problem throughout society. It is not just peculiar to the securities industry. We have it in all sorts of businesses wherever the government is trying to regulate. I hate to keep picking on the insurance industry, but there is a regulatory body with respect to the insurance industry. It makes some sense when government makes an appointment to a board that is governing that industry, that it tries to get somebody who knows something about the industry. It would be nice to appoint a bunch of people who have a blank mind on the issue, but that is not what happens. The government tries to get some people on the board who know about the industry.
What happens is that the people who are chosen come from the industry. At the end of the day, there is a regulatory body made up of people who, in essence, are trying to keep tabs on and regulate their friends. That is why we have so many difficulties in this whole regulatory environment.
We have to deal with this from a different perspective. We have to deal with it from the standpoint of protecting the consumer and getting people whose motives are pure, whose motives are direct, who want to enforce the law and want to make sure that the public is protected. That is the bottom line.
I have less concern about the area of provincial jurisdiction than some members here, particularly the members who introduced this motion.
Having said all of this, the government is embarking on an exercise where it is trying to enforce its views in a situation where it is a minority government and we are dealing with constitutional issues. We all know where constitutional issues have gotten us over the years. Some of us went through the Meech Lake debate and the Charlottetown debate. We should have learned enough from that process to know that it is best to leave these issues alone.