House of Commons Hansard #60 of the 40th Parliament, 3rd Session. (The original version is on Parliament's site.) The word of the day was financial.

Topics

Opposition Motion—Securities Regulation
Business of Supply
Government Orders

4:25 p.m.

Bloc

Guy André Berthier—Maskinongé, QC

Mr. Speaker, I would like to congratulate our colleague from Joliette on his excellent speech. With their bill, the Conservatives hope to centralize the securities market in Toronto.

The hon. member for Joliette and the many members who spoke during today's opposition day have demonstrated that the current system works very well. It is effective and one of the best in the world. This is recognized by the OECD and the World Bank.

Can my colleague tell me how a Canada-wide commission might give investors less protection when it comes to securities than the current system, which is very effective?

Opposition Motion—Securities Regulation
Business of Supply
Government Orders

4:25 p.m.

Bloc

Pierre Paquette Joliette, QC

Mr. Speaker, no argument justifies implementing a Canada-wide securities commission. The current system works and is recognized around the world. Constitutionally speaking, this matter falls under provincial and Quebec jurisdiction. So some other explanation is needed. Why does the Conservative government, the federal government, want to create a Canada-wide securities commission?

As I explained earlier, this is an economic and industrial development strategy they have developed based on the interests of the Canadian nation. This strategy targets two main sectors: the automotive and oil sectors—in Ontario and western Canada—and the financial sector.

At present, Quebec, Montreal, Toronto and Alberta all share the pie. The portion regulated by Ontario is only 22%. The larger part is regulated elsewhere. To destroy that system, the Conservatives are going to create a problem by implementing this Canada-wide securities commission. This will cause such a mess that the business community, even in Quebec—particularly because of the need to ask for a permit and the elimination of the passport system—will lobby for a single securities commission.

That is the ultimate goal of the Conservative government, all for Toronto's benefit.

Opposition Motion—Securities Regulation
Business of Supply
Government Orders

4:25 p.m.

NDP

Jim Maloway Elmwood—Transcona, MB

Mr. Speaker, I am pleased again to discuss this issue today. Once again, I am going to quote from the article written by the Alberta minister of finance. He said that all financial services have been regulated by the provinces for the last 100 years. We are talking about credit unions, insurance and pensions. There is a lot of jobs at stake.

He said:

When it comes to diversification of the Alberta economy, financial services is one of the fastest growing sectors...The job-multiplying effect of having a provincial-based securities commission has been well documented by Quebec. As Canada and the rest of the world emerges from the recession, Alberta will lead the way. If we let the Alberta Securities Commission get scooped up and transferred to Toronto, we can also say goodbye to thousands of spinoff jobs in investment banking, law, accounting and financial analysts.

I assume that will be the same argument that will apply to Montreal. I assume that will be the same argument that Manitoba will use and has used for the last 10 years.

Would the member like to add any further comments to that?

Opposition Motion—Securities Regulation
Business of Supply
Government Orders

4:30 p.m.

Bloc

Pierre Paquette Joliette, QC

Mr. Speaker, that is quite right. I have the figures here. For Montreal, we are talking about 97,000 direct jobs and 150,000 direct and indirect jobs. For Quebec as a whole, we are talking about 155,000 direct jobs and 300,000 direct and indirect jobs.

We have already seen job losses in this sector resulting mostly from the transfer of stock exchange activities from Montreal to Toronto. In Quebec, between 1991 and 2008, 8,000 jobs were lost, whereas 52,000 jobs were created in Ontario, as well as in Alberta, considering that the oil boom also had an impact. The same thing happened in British Columbia. However, Quebec is especially threatened by the future establishment of a national securities regulator since jobs are already moving from Montreal to Toronto.

I did not finish the list of those who want the federal government to withdraw the draft legislation on the securities commission. The cities of Montreal and Quebec are part of the coalition and for good reason. They are very aware of the effect of the Minister of Finance's major move.

I will close by stating that they already plan on spending $150 million to establish this commission even though we already have a very efficient system in place. That is throwing money out the window. It is like the fake lake, the cardboard decorations and the money being spent to prepare for the G8 and G20 meetings.

I am convinced that the battle is just beginning and that we can only be victorious.

Opposition Motion—Securities Regulation
Business of Supply
Government Orders

4:30 p.m.

Bloc

Guy André Berthier—Maskinongé, QC

Mr. Speaker, I think that this bill simply aims to steal from Montreal's financial sector to strengthen Toronto's.

Can my colleague from Joliette explain how the Conservative and Liberal members elected in Quebec can go against the unanimous consensus of the National Assembly? It has told the federal government to maintain our current financial system because it works and it supports our economic initiatives.

Opposition Motion—Securities Regulation
Business of Supply
Government Orders

4:30 p.m.

Bloc

Pierre Paquette Joliette, QC

Mr. Speaker, I believe that this is the most blatant proof that the Bloc Québécois members are the only ones uncompromisingly defending Quebec's consensus and the National Assembly's unanimous motions. We do not ask if it will be bad for such and such a group. We are here to serve certain interests and we will not compromise on that. It is sad to see that the Quebec members from the national parties are sometimes forced to compromise just so they can keep their seat in the Conservative caucus.

However, in the end, the voters will decide. If I were in the same situation as many of them, I would look ahead and see that the future does not look promising. Many of them will lose their summer job.

Message from the Senate
Government Orders

4:30 p.m.

Conservative

The Acting Speaker Barry Devolin

Order. I have the honour to inform the House that a message has been received from the Senate informing this House that the Senate has passed the following public bill to which the concurrence of the House is desired: Bill S-203, an act respecting a National Philanthropy Day.

It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Vancouver Quadra, Access to Information; the hon. member for Dartmouth—Cole Harbour, Persons with Disabilities.

The House resumed consideration of the motion.

Opposition Motion—Securities Regulation
Business of Supply
Government Orders

4:30 p.m.

Conservative

Bernard Généreux Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC

Mr. Speaker, thank you for giving me an opportunity to respond to the motion presented by the member for Hochelaga.

The Bloc Québécois' finance critic has the right to express his point of view on a Canadian securities regulator, but he cannot twist the facts to suit his purposes, which is something he does very well.

This is not the first time that an opponent of a Canadian securities regulator has quoted the Organisation for Economic Co-operation and Development (OECD) selectively to back up his position.

The OECD supports creating such a body in Canada. In its survey of Canada, it said the following:

The current diversity of regulations—for example, each province has its own securities regulator—makes it difficult to maximize efficiency, and increases the risk that firms will choose to issue securities in other countries. A single regulator would eliminate the inefficiencies created by the limited enforcement authority of individual provincial agencies,

The International Monetary Fund (IMF) noted the following in its report on Canada: 2009 Article IV consultation.

A federal regulator could coordinate more readily with other regulators in monitoring risks and responding quickly to a crisis, and could also have an enhanced focus on the issues that securities markets may pose for national financial stability.

If the Bloc Québécois finance critic refuses to acknowledge what the IMF and the OECD have said, then he should at least listen to Earl Jones' victims, who also agree with this proposal. Joey Davis, the spokesperson for Earl Jones' victims, stated that they support the Minister of Finance's initiative and that he wants Mr. Bachand and Premier Jean Charest to work with Ottawa instead of against it.

Canadians know that we are going through tough times, and they want the government to do everything it can to ensure the country's stability and economic growth, which is exactly what our government is doing very well.

We all know that in 2007 and 2008, the global economy was on the brink of disaster for reasons that were not under Canada's control and were due primarily to bad decisions made in the United States. The stock markets plunged and many multinational banks went bankrupt, only to be saved by the state, or in other words, by taxpayers.

The turmoil that the capital markets were thrown into around the world has had a real impact, and not just on prosperous bankers and fund managers. Whether it was small investors, retirees or families setting money aside for the future, everyone felt the effects of the crisis when the value of investments like RRSPs and mutual funds literally collapsed.

During the global crisis, access to credit became the main problem facing Canadians. After all, if families and households could not obtain the financing they needed, Canada would be unable to promote the strong growth needed to get out of the recession.

That is why the government created a $200 billion extraordinary financing framework to facilitate access to financing for Canadian households and businesses during this extremely difficult period.

This was a robust initiative with several components. Under the framework, we launched the Insured Mortgage Purchase Program to respond to the global credit crisis. We expanded financing support through two Crown corporations: Export Development Canada (EDC) and the Business Development Bank of Canada (BDC).

We also established the Canadian Lenders Assurance Facility (CLAF) and the Canadian Life Insurers Assurance Facility (CLIAF), which are both designed to help Canadian financial institutions gain access to global credit markets by providing loan guarantees similar to those offered in other countries.

This speedy and energetic response meant that Canadian banks and other financial institutions remained very solid, well capitalized and less dependent on leverage than their foreign competitors. Clearly, our plan has worked.

Today, global capital markets are relatively stable, and the Canadian financial system is on solid footing. The World Economic Forum considers our banks to be the most solid in the world. We can be proud of this.

However, there is a major flaw in our system that the global economic crisis brought to the forefront: Canada is the only industrialized country that does not have a single securities regulatory authority.

The debate about creating a Canadian securities regulatory authority has gone on for years. In 1935, the Royal Commission on Price Spreads recommended that a national securities commission be created. Since then, Canadian and international studies have recommended that a single regulatory body be created.

Unfortunately, things have changed little over the decades. The result is that our country of 34 million people has 13 regulatory agencies, 13 sets of rules and 13 fee schedules. In a world characterized by the interconnectedness of capital markets, where investors can invest billions of dollars virtually instantaneously, we have to lower barriers rather than raise them.

International organizations like the International Monetary Fund and the Organization for Economic Cooperation and Development believe this fragmentation is a major flaw in our system. And the government is taking measures to remedy that flaw.

Creating a Canadian securities regulatory body was a key commitment in each of the budgets we have introduced to date. Working with the provinces and territories, we were the first to call for a more efficient and simpler system of securities regulation. And today we are closer to the goal than any government that came before us.

Since the 2006 election, the government has been preparing to establish a Canadian securities regulatory body. We have made more progress than all of the previous governments.

In February 2008, the government established the expert panel on securities regulation, tasked with providing independent recommendations and advice to federal, provincial and territorial ministers on how best to improve securities regulation in Canada.

According to the expert panel's final report:

While the terminology has differed over the years...the conclusion of virtually every study has been the same: Canadians are ill-served by such a balkanized system. It is worth noting that Canada is the only developed country without a national securities regulator.

In July 2009, we announced the creation of the Canadian Securities Transition Office, with the mandate to lead the transition to a single Canadian securities regulator and to develop a proposal for draft Canadian legislation to be known as the securities act.

In collaboration with the 10 participating provinces and territories, the transition office has developed a draft Canadian securities act. It is presently preparing a comprehensive transition plan and will soon begin to develop the regulations and procedures that will accompany the draft securities act.

The Bloc must know that a few months ago the government of Quebec decided to make a similar referral to the Quebec Court of Appeal.

It is therefore appropriate for the Government of Canada to refer the matter directly to the highest court in the land in order to obtain a definitive decision on the constitutional power of the Parliament of Canada to legislate in this area.

Benoît Pelletier, a professor in the Faculty of Law at the University of Ottawa, who was the Quebec minister of Canadian intergovernmental affairs from 2003 to 2008 says that “deciding to ask the [Supreme] Court for an opinion is just and fair in my opinion“.

I believe this measure is raising concerns in Quebec. I can tell you that, over the years, studies have consistently shown that having 13 regulatory bodies, 13 sets of officials and 13 legal standards, let alone all the attendant paper shuffling and red tape, causes very high costs for companies all over the country, including those in Quebec. Those costs will go down when all these various regulatory bodies have been combined into one.

To draft the legislation, the government already had the firm support of the provincial-territorial advisory committee made up of British Columbia, Saskatchewan, Ontario, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, the Northwest Territories, Yukon and Nunavut. We thank them for their vision and their desire to create a better system.

The proposed Canadian securities act that resulted from their efforts will lay the foundation for a new Canadian securities regulator, which will provide better and more consistent protection for investors across Canada. Furthermore, it will also improve regulatory and criminal enforcement in order to better fight white collar crime. People who commit securities fraud will face a stricter, more thorough system, and more importantly, one that is easier to enforce.

More specifically, the proposed legislation will cover securities-related offences currently covered by the Criminal Code, including securities fraud, market manipulation, insider trading and misrepresentation of the facts. And these provisions will apply across Canada.

At present, provincial securities regulators hand nearly all cases over to the police for investigation any time criminal conduct is suspected. Giving the regulatory body the opportunity to investigate these crimes will allow it to take on a role that complements that of the police, bringing in new expertise, providing additional resources and increasing the field staff in order to combat securities-related crimes.

The proposed legislation also gives new powers to gather evidence in order to reduce the time and resources needed to investigate securities-related crimes. In short, a Canadian securities regulator will have the mandate, structure and powers needed to intervene on a national level. We will fill in the gaps. This is a major step forward for Canadian investors.

The legislation will also establish new powers to gather information from market participants in order to ensure financial stability.

The provinces, including Quebec, could choose to continue with their own securities regulator. I will repeat that because it is important: the provinces, including Quebec, could choose to continue with their own securities regulator. We will respect the jurisdiction of the provinces that choose not to take part and we will continue to invite them to contribute to setting up a better system.

The Government of Quebec could very well decide to keep its own securities regulator, but we hope it will embrace the wisdom behind creating a new Canada-wide regulatory body, especially given the interconnectedness and the great complexity of modern capital markets.

With the proposed Canadian securities act, the government has taken a significant step toward filling a major gap in our system and ensuring that our securities regulatory system serves as an example, as our financial system does, to the international community. I hope that all the provinces and territories will eventually see the benefits of these efforts and will work with the Government of Canada on implementing a Canadian securities regulator.

In closing, I would like to come back to a statement by Marcel Boyer, vice-president and chief economist of the Montreal Economic Institute and Bell Canada professor of industrial economics at the University of Montreal:

A single securities commission with a strong regional presence would favourably resolve the complex issue of regulating securities in Canada: keeping decentralization beneficial, where businesses remain free to deal with either office, while providing regional or industrial entities with a strong voice within a single national body that defines and applies uniform standards and regulations. With decentralized non-exclusive offices [again, non-exclusive offices] that are nevertheless able to influence for the better, a single securities commission would promote innovation and efficiency in terms of financial market regulation while at the same time ensuring de facto mutual recognition of regional sensitivities and distinctive features.

Opposition Motion—Securities Regulation
Business of Supply
Government Orders

4:45 p.m.

Bloc

Daniel Paillé Hochelaga, QC

Mr. Speaker, for a former printer, a missing character makes a bad impression. I hope he will get over it. He will need to when he returns to his trade after the next election.

He did manage, though, to read his text reasonably well. I would like to point out to him that he admitted that Canada came to the help of the banks, something the government has always refused to say. He also mentioned EDC and said that Canada had set up insurance facilities and loan guarantees. So it was part of the system.

He said we have to reduce barriers. But there are no barriers now. The passport system means there are no longer any barriers. Fifteen years ago, there were 13 different commissions and 13 sets of rules and regulations, but that is no longer the case. He said very clearly that his government would not respect Quebec passports. It is the government, therefore, that is erecting barriers.

When he goes back to his business and wants to issue securities, he will need to have his passport in Quebec but will not be able to go abroad, to Canada, to find financing, whereas he can now.

Opposition Motion—Securities Regulation
Business of Supply
Government Orders

4:50 p.m.

Conservative

Bernard Généreux Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC

Mr. Speaker, the member for Hochelaga is a very good actor. If he were in the Gala des Olivier in Quebec, I am sure he would win some incredible awards. He is a fabulous actor, not just in the House but also in committee. I really must congratulate him because he is really very good.

The member for Hochelaga is trying to make Quebeckers think that, being in Canada, we would not be winners if we were on a national leveraging effect. I would like to draw to his attention, though, that until there is evidence to the contrary, Quebec is part of Canada, to the great annoyance of the Bloc members here today. Quebec must therefore respect the other Canadian provinces that want to be part of a regulatory system like this. Every province can choose whether to be part of the system or not. We say it over and over: the system is not being imposed. In return, the other provinces must also show respect for Quebec. That is why the government plan is a voluntary one.

Opposition Motion—Securities Regulation
Business of Supply
Government Orders

4:50 p.m.

NDP

Jim Maloway Elmwood—Transcona, MB

Mr. Speaker, the member who just spoke is at odds with his fellow Conservative finance minister from Alberta, Ted Morton, who is asking what Ottawa is trying to fix that has not already been addressed or could not be fixed within the current passport system.

Why is the Alberta finance minister asking questions about why it is that we have gone through 10 years of harmonization efforts to create a passport system that is working very well? Why is he saying that the Canada passport system is recognized as among the best in the world, with the OECD and the World Bank group rating it ahead of the United States and the United Kingdom? Two years in a row the Milken Institute ranked Canada first as having the best access to capital.

Why is the Conservative finance minister in Alberta asking these questions and attacking what the government is doing?

Opposition Motion—Securities Regulation
Business of Supply
Government Orders

4:50 p.m.

Conservative

Bernard Généreux Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC

Mr. Speaker, the system that our government currently wishes to implement will protect Canadian investors. I sincerely believe—and I mentioned this in my speech—that the victims of Earl Jones support this bill.

I would also like to speak about Mr. Lacroix's victims because this morning I heard a colleague opposite say that 900 people in Quebec had been compensated by the AMF. I can say that 900 out of 6,000 is not very many. If we could go back in time a bit to Mr. Lacroix's heyday when he caused all sorts of problems for his investors, we could ask people if they thought the AMF did extraordinary work on this issue. The AMF was accused by all sides. I sincerely believe that the AMF, like any other system in Canada, can be strengthened and improved.

Opposition Motion—Securities Regulation
Business of Supply
Government Orders

4:50 p.m.

Fort McMurray—Athabasca
Alberta

Conservative

Brian Jean Parliamentary Secretary to the Minister of Transport

Mr. Speaker, I appreciate the opportunity to thank the NDP member across the way for supporting a Conservative finance minister. I hope he does that for more than just the province of Alberta and supports the federal Conservative finance minister, the number one finance minister in the world.

We will eliminate duplication and unnecessary costs through this process. It is a situation where there will be no office closures and no loss of jobs. It is voluntary. I do not know what the member does not understand about it being voluntary, but it is a voluntary system and it gives Canada a competitive advantage.

My interest is in what we would lose as a result of not going ahead with the system. I have looked at some of the reports by, for instance, the Canadian Bankers Association and the Investment Industry Association of Canada and they have clearly said that we are losing opportunity in Canada.

I am wondering if the member could comment on John Coffee's Colombia University study which shows that Canada loses about $10 billion a year in economic output and 65,000 jobs. Why has this not been done before? Could the member elaborate a bit on what we are losing as an opportunity cost?

Opposition Motion—Securities Regulation
Business of Supply
Government Orders

4:55 p.m.

Conservative

Bernard Généreux Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC

Mr. Speaker, I thank my colleague for the very good question.

In fact, the people of Alberta know how to count. I can actually say that Mr. Coffee's study states in particular that, with a national regulator, there could potentially be additional investments of more than $10 billion in Canada, which is not peanuts. With these investments, we could potentially create 65,000 jobs in Canada.

Therefore, the work we are doing will improve conditions in Canada so that investors will invest in Canada. Canada's population of only 34 million is equivalent to that of California.

I sincerely believe that it is in our interest to work together to establish a national commission.