Good morning. I'm going to speak this morning about toxic investment products and how they've contributed to the financial crisis in Canada.
My apologies. I have a very hoarse voice this morning. Hopefully I'll get through this.
The financial crisis in Canada is wreaking havoc on millions of Canadians through pension fund underfunding, lost savings, and now lost jobs. We have the filing for bankruptcy protection in Canada of AbitibiBowater, Smurfit-Stone, Masonite, and Nortel, and General Motors is expected to do so as well. I'd like to note that the Nortel case is a legal precedent-setting one in which a major corporation of Canada plans to lay off thousands of people and not pay severance. In addition, the Nortel pension fund is expected to have a deficit of as much as 40%. So there is real anxiety among the Nortel pensioners and the severed workers of Nortel.
In many instances, the corporate calamities that are leading to the distress in the world can be tracked back to securities crime. There has been no policing, intervention, and deterrence in our country. Effective securities crime policing is a necessary ingredient for the stability of Canada's financial system. The world's financial system, including Canada's, has been rocked with systemic fraud in subprime mortgages--structured income products sold by the securities industry.
I've given testimony to your committee on two occasions: once on the income trust product, which we said was subject to systemic fraud in deceptive yields; and more recently on the non-bank, asset-backed commercial paper product, in which there is presently 85ยข of market-to-market loss on the dollar. That represents $27 billion of current losses in the asset-backed commercial paper product line of Canada. As I warned on the income trust product in 2005 and 2006, we have over $30 billion of damages in the business income trust market product alone, with about the same amount likely in the energy income trusts.
The Expert Panel on Securities Regulation responded to the public outcry about Canada's failure to deter securities fraud on January 12 by proposing a new national securities commission and having a consumer advisory panel report to that commission. The Investment Industry Regulatory Organization of Canada has responded to the public outcry with a new Canadian Foundation for the Advancement of Investor Rights. The OSC's answer to the outcry was to introduce a new investor secretariat a few weeks ago. We say that all of these proposed remedies by the investment industry and by the provincial securities regulators are sadly inadequate. These are not the appropriate remedial actions to be taken, given the lessons we must learn from the financial crisis throughout the world, now bearing down on our country as well.
I want to spend a few moments talking about securities crime policing in Canada. We do not agree with the RCMP's integrated market enforcement team having exclusive jurisdiction for securities crime policing in our country. We strongly disagree with the current actions of the Royal Canadian Mounted Police to integrate its exclusive securities crime unit with the securities regulatory system of Canada. We believe it is totally unacceptable that all current RCMP IMET securities criminal complaints and plans for investigation are obliged by this federal government to be shared with the joint consultation group.
We have a letter from Dean Buzza, the head of the RCMP IMET, indicating that every securities crime complaint and plan for an RCMP investigation must first meet with the approval and recommendation of the Investment Industry Regulatory Organization of Canada and the Mutual Fund Dealers Association of Canada. We believe this is wrong and highly vulnerable to corruptive influences on whether or not securities crime investigations are taking place in this country.
We agree that Canada should adopt a new federal-provincial securities crime unit that was proposed and designed by Gary Logan, who has 32 years of service in the securities crime policing field. We do not believe the securities commission, the current provincial commissions, nor the proposed national securities commission should be involved in securities fraud policing. This is the work of the police, and we believe the new securities crime unit, which is described in a video that's been put together by Gary and me, is the way for our country to go in order to receive justice for the victims of securities crimes.
Thank you.