Finance Committee on May 28th, 2008

[Serge Dupont]

Mr. Chair, I could only refer to the document that has been issued by the government. What it is talking about is a common securities regulator based on the willing participation of jurisdictions.

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

So you're working on a cooperative model. When push comes to shove--and there has been a lot of fuss coming from Quebec and a lot of fuss coming from Alberta--are you not prepared to go it alone?

[Serge Dupont]

I am saying that the mandate given to the panel is quite clear. It is saying that the proposal will be respectful of the jurisdictional framework for securities regulation in Canada and will allow willing participation of provinces and territories.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

Monsieur Crête, you have seven minutes.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you, Mr. Chair.

Thank you for appearing so quickly after we made the request.

Let us talk about jurisdiction in securities. Is it your opinion that securities fall under provincial jurisdiction?

[Serge Dupont]

Let me say two things. First, the provinces clearly have the constitutional power to administer the structures that they are presently administering. However, a number of previous studies have looked at the question. I also have here the report that was completed in 2003 and that contains three legal opinions. They all make it clear that the federal government also has the constitutional power to make proposals on the question. Many opinions along those lines have been issued in the past.

This is an area of shared jurisdiction that, at the moment, is occupied by the provinces.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

For how long has that been the case?

[Serge Dupont]

For a very long time, as you know.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Has it not been since the beginnings of Confederation?

[Serge Dupont]

In broad terms, yes.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

You are aware of the position of the Government of Quebec and the governments of some other provinces. How can we justify spending millions of dollars in an area of provincial jurisdiction, without provincial agreement? The last time I heard Ms. Jérôme-Forget's opinion on the question, it could not have been more clear. For her, the plan was unacceptable.

Is it not a waste of money to do research in an area where Quebec and other provinces are completely opposed? Is the government not running into a wall, and heading for legal confrontation, if we accept this kind of revenue and expense?

[Serge Dupont]

I think that the government must also listen to other parties, this committee, for example, which has expressed an opinion on two occasions. If I refer to the 2007 report on pre-budget consultations and to the 2006 report, this committee recommended that the government move into the area.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

But not unanimously, perhaps.

[Serge Dupont]

Perhaps not unanimously, I grant you.

The Standing Senate Committee on Banking, Trade and Commerce has made the same recommendation in the past, as well as distinguished groups from the private sector: the wise person's report of 2003, the Crawford committee in 2006, one of whose members was appointed by the Government of Ontario and that had wide representation from all across the country. International bodies have also expressed their opinion, and we can mention them too. So there have been several other parties. I feel that the government has decided to listen to those other parties too and to try to work cooperatively with the provinces.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Given the present credit crisis and the crisis in financial markets, where responsibility may be shared, do you not think that provincial commissions could have responsibilities too? The superintendent of financial institutions could bear some responsibility, as could the Americans or anyone else on the planet. Is it not a little premature to conduct a study like this before we have an assessment of the situation as a whole?

[Serge Dupont]

I do not know if it is premature. As you know, this matter has been debated in Canada for almost 40 years. A number of studies have looked at it. Given the credit crisis and its consequences, it would be premature to come to complete and final conclusions about those events, but really, it all adds to the information that needs to be considered in determining where securities regulation has to go in Canada.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

There will be two days of meetings between the federal and provincial ministers of finance. Do you think that there will be unanimous agreement to pursue the idea of this committee, or will some provinces continue to express their firm opposition to the establishment of such a body?

[Serge Dupont]

I do not think that the minister is going to the meeting expecting to get unanimous agreement on the final conclusions of the expert panel, especially since that panel has not finished its work. The positions of some provinces and some ministers are well-known. The debate will continue, and the minister will bring up the matter with his counterparts whenever he has the opportunity.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

You are saying that the government proposes to create one common securities regulator. Does that imply unanimity from the provinces and territories? Is it conceivable that one of them will not participate in the proposed program, but that it would still be possible to put this common regulator in place?

[Serge Dupont]

I cannot express an opinion on that at the moment. Choices will have to be made once negotiations begin, and once discussions are held based on a report and a specific proposal. The intent is for willing participation. What will happen if not all parties are willing to be involved? It will be up to the ministers to decide and to debate situations like that.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Are the provinces contributing to the funding or is the panel 100% federally funded?

[Serge Dupont]

It is entirely federally funded.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Is that not going to skew the conclusions of the study a little?

[Serge Dupont]

Those appointed to the panel are people of skill and integrity. After all, they are the ones who are going to have to sign the report and make the recommendations. I feel that we can rely on their integrity.

[Paul Crête, Bloc, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

I am not questioning their integrity. I am just pointing out that the response is going to the federal government only. Since the provinces have not been parties to the contract from the outset, they have not been able to set terms for the study that would address their situations.