Finance Committee on May 28th, 2008

[Mike Wallace, Conservative, Burlington, ON]

I appreciate that.

Thank you.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

Monsieur Mulcair.

[Thomas Mulcair, NDP, Outremont, QC]

I spent part of my career, six years, as president of the Office des Professions du Québec, which is a regulatory body. So I was in a position that may be similar to those held by some of the people who are here today.

I started working in private administration when I was 30. When someone suggested a reform, I always applied the principle of consistent management by asking myself...It is in the nature of politicians and bureaucrats to suggest reforms. When in doubt, suggest reforming something.

Before going down that road, I asked myself about the "compétence" of the federal government, but "compétence" and competence are not the same thing. The words can mean different things. Earlier, my learned friend Mr. Dupont told me...

[Serge Dupont]

I am not a...[Editorial Note: inaudible]

[Thomas Mulcair, NDP, Outremont, QC]

Okay. Because of the way in which you replied, I promoted you to a lawyer. But I assume you have a degree that makes you learned, don't you? If you are learned, you can be my learned friend, even if you are not a member of the Bar.

Now, back to competence. Not the constitutional kind, which we described very well a little earlier. Just plain competence.The question still arises. What would be the federal government's role? Which problems would federal interference solve? None. It was Quebec law that put Vincent Lacroix in the slammer for 12 years.

When I look at the charges as a result of the sponsorship scandal, when the Liberals stole public money to put into their election coffers, I see that none were the result of the inquiries or of the application of federal legislation. The only charges I see were laid in Quebec, and they have resulted in people going to prison.

I also notice that my Liberal colleagues who represent strongly francophone constituencies, like Mr. Rodriguez or Mr. Coderre, are nowhere to be found when the time comes to vote on the matter. So not all Liberals are in favour of this, and they know it all too well.

So, which problems would be solved by the creation of another behemoth of bureaucracy in Ottawa?

[Serge Dupont]

There are three parts to your question. Let me start with the first.

[Thomas Mulcair, NDP, Outremont, QC]

You do not need to talk about Mr. Coderre.

[Serge Dupont]

No, I will leave him out.

The Vincent Lacroix case is indeed a feather in Quebec's cap. But you will agree that it does not deal with Canadian securities law, a matter that your predecessor as critic raised. This is a real concern with which all jurisdictions in Canada have to come to grips.

Criminal law, I am sure you will agree, is the responsibility of the Royal Canadian Mounted Police at the moment. So there is at least one role for the federal government.

I understand what you are saying about competence and "compétence". There is no army of federal public servants ready at a moment's notice to take on the challenge of running a securities regulator. Nor is there any intention to do so. That is why the distinction between a common regulator and a federal one is important. The idea of a common regulator is to use existing resources, whether in Quebec, in Ontario, in Alberta, in British Columbia, or anywhere else, using a different governance structure that brings them all together in one body. As we see it, that is the structure that would work best for Canada.

That is perhaps where the problem lies. Basically, it is all about the governance structure. How, in Canada, can we develop policies more quickly so we can become involved internationally with greater effect? Because it is there that, to an increasing extent, the major provisions for regulating capital markets are being negotiated.

We could talk about aspects of the governance structure for a long time. I will stop here to allow discussion and to catch my breath.

[Thomas Mulcair, NDP, Outremont, QC]

Mr. Dupont, let me ask you the question in a different way. Earlier, you brought up the RCMP and the clear federal jurisdiction over criminal law. You are aware of the Vincent Lacroix case because you alluded to it. Given that you know the evidence as well as I do, could you please tell me why there were no charges of any kind laid by the RCMP or the federal government? And exactly the same number of charges have been laid in sponsorship scandal as in the Vincent Lacroix case.

You come here today to lecture the provinces and to tell them that you have to bring together this and head up that, and take over the file because it is not working. We hear international this and credit crisis that, but you have provided no evidence that it will serve any purpose. Securities regulation is working very well in Quebec. We have no need for an ethics lesson from our big federal brother. We do not have a problem.

[Serge Dupont]

The minister has no wish to give ethics lessons to anyone, I feel, and I certainly do not. But I still feel that a number of people in the past have expressed the view that the regulatory structure in Canada can be improved. Even the Government of Quebec recognizes this to the extent that it is involved in a program to improve regulation through the passport system. This is another way to improve regulation. There is consensus that we need to improve our regulation, our structures, and our ability to adapt the regulation to changing times. But I acknowledge that there is no consensus on the best way to do it.

[Thomas Mulcair, NDP, Outremont, QC]

With all respect, Mr. Dupont, you are playing with the truth a little when you say that Quebec recognizes it. In fact, all the parties in the National Assembly unanimously passed a motion condemning this program. It is very hard to say that Quebec recognizes it.

Quebec is ready to work with the other provinces, but on its own terms. There is no question of having something imposed on us. What we have here is a unilateral attempt on the part of the Conservatives to impose something despite the unanimous vote of the National Assembly.

[The Chair, Conservative, Rob Merrifield]

Okay. Can we have a very quick answer to that? The time has gone.

[Serge Dupont]

I did not say that the government of Quebec recognized the program, but that it recognized the need to improve regulation. Clearly, at the moment, it is choosing another way to work towards this improvement.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

Mr. McCallum.

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you.

I'd like to share my time with Mr. McKay.

When the finance department studies tax policy proposals or other proposals, do you do a gender-based analysis?

[Brian Ernewein]

Yes, we do.

[John McCallum, Liberal, Markham—Unionville, ON]

Over the last two to three years, has there been any improvement in the methodology, or intensification of the methodology, in terms of how you conduct that analysis, or is it the same as it was when we were in government?

It's not that long ago.

[Brian Ernewein]

I'm not sure. I think we certainly learned from experience and ended up doing a better job on some of the analysis than when we first started these. But since they have been done, I think they've been done well enough, and presumably they are getting better.

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you.

Mr. McKay.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Mr. Mulcair is wrong.

[Thomas Mulcair, NDP, Outremont, QC]

Rarely.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Rarely--in his own mind.

[Some hon. members]

Oh, oh!

[John McKay, Liberal, Scarborough—Guildwood, ON]

What's fair to say is that the business community is virtually unanimous from coast to coast to coast that Canada is in need of a common securities regulator. That's not even contestable. And it's true in Quebec as well as Alberta and a whole variety of.... There is a need for this, and that is what the driver is here, so I'm pleased to see you asserting some leadership in this area.

The other problem is that effectively the common securities regulator becomes Ontario by default, because the overwhelmingly vast number of securities get traded in Toronto. So it seems a somewhat strange idea that those who oppose a common securities regulator are prepared to defer to Toronto and let the Ontario Securities Commission, the OSC, effectively run securities regulation in this country.

If the place where far and away the most securities are traded is prepared to be onside and is a driver behind this common securities regulator, why is it that Ontario in effect is prepared to share jurisdiction with the rest of the provinces and territories and effectively cooperate with the federal government in trying to set up a common securities regulator so that the people who issue securities don't have to go to 13 separate jurisdictions to be able to do a share issue?

[Serge Dupont]

It's a fair question, which would be best addressed to the Government of Ontario.

I can only presume the position is founded on a conviction that somehow, if there is a better regulatory system for Canada writ large, it would benefit Canada's capital markets and ultimately will benefit all the jurisdictions, including Ontario. That has to be the calculation. I'm sure they're not doing it as any kind of benevolent gesture toward the other jurisdictions.