Evidence of meeting #4 for Finance in the 40th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was advertising.
A recording is available from Parliament.
Bloc
Robert Carrier Bloc Alfred-Pellan, QC
Thank you, Mr. Chair.
Good day, gentlemen. While we have you here, I would like to take this opportunity to ask you three questions about the pan-Canadian securities commission mentioned in the budget. The committee of experts that recommended the creation of such a commission reported that a legal opinion had been issued on the constitutionality of this national body.
Would it be possible to obtain a copy of this legal opinion?
Director, Financial Sector Policy Branch, Department of Finance
To be honest, I really don't know. It was issued by a panel of experts working for the minister. It was part of their work. I'm not sure how they arrived at this opinion. I'll have to get back to you.
Bloc
Robert Carrier Bloc Alfred-Pellan, QC
Surely it is available, because it was part of the committee's recommendation. Anything involving the Constitution is important.
The provinces would be free to participate, or not participate, in a pan-Canadian securities commission. If a province opted not to take part, but a business in that province decided to register with the pan-Canadian commission, would it be treated differently? Does one option have a clear advantage over the other? Would the company that registered with the pan-Canadian commission have an advantage, compared to one that registered with the provincial securities commission, which would be allowed under your legislation?
Director, Financial Sector Policy Branch, Department of Finance
Generally speaking, the aim in creating a national securities commission is to ensure more efficient operations, to adopt regulations and to apply these regulations faster than is possible under the current system that is comprised of the 13 provincial securities commissions.
Bloc
Robert Carrier Bloc Alfred-Pellan, QC
You can answer the question in English, if that's easier for you.
Director, Financial Sector Policy Branch, Department of Finance
My response would probably be clearer.
Director, Financial Sector Policy Branch, Department of Finance
It is not seen as directly advantageous to a specific company to participate in a national or a Canadian securities commission as much as it is seen to be to the advantage of the system as a whole to have a Canadian securities commission. The opt-in identified by the panel as a possible future option is to allow companies to take advantage of the efficiency and overall effectiveness of a national, or a pan-Canadian, securities commission. As far as I am aware, there is no particular financial advantage for a company to do so.
Bloc
Robert Carrier Bloc Alfred-Pellan, QC
You're saying that depending on the type of business in which a company is engaged, it might be more advantageous for it to register with the pan-Canadian commission. Is that right?
Director, Financial Sector Policy Branch, Department of Finance
Not exactly. I am saying it could be in the best interests of a company that is borrowing money internationally and therefore dealing with international securities rules to be registered at the national level as opposed to the provincial level.
Bloc
Robert Carrier Bloc Alfred-Pellan, QC
Therefore, in Canada, it would be possible for a company to be registered in only one Canadian province. Agreements could be reached between the two securities commissions, that is between the provincial body and the national body. We're seeing that happen right now.
Conservative
The Chair Conservative James Rajotte
That's a very brief answer, thank you.
We'll go to Mr. Del Mastro, please.
Conservative
Dean Del Mastro Conservative Peterborough, ON
Thank you, Mr. Chair.
I note in the estimates a crown share adjustment program for the Province of Nova Scotia, and it was determined by a panel that Nova Scotia would receive roughly just over $234 million. My understanding from the Library of Parliament is that that extends from the agreement under the national energy program.
It leads me into a question I'd love to get the answer to, and it deals with offset payments. I'm very curious. How is it, in a country where we have a system of equalization, that we also have offset payments that are separate from equalization but seem to also cloud the issue of equalization? I'm very curious as to why, for example, Newfoundland is receiving an offset payment when they exceed the fiscal cap of Ontario. How was that agreement struck, and why is there so much open-ended interpretation of what that means?
Director, Federal-Provincial Relations and Social Policy Branch, Department of Finance
These offset arrangements are long-standing agreements, the origins of which, in some cases, go back to the late sixties, early seventies.
This agreement attempts to work out a framework for offshore oil and gas development and who would benefit from offshore oil and gas development, who owns the offshore resources. Over time, involving many different governments and many different steps, different agreements were put in place, including the 1985 accord. They have lots of different provisions, but in the case of the offset payments to the Government of Newfoundland and Labrador, there are provisions for the offsets to protect or to limit the decline of Newfoundland's equalization year over year, and it's perfectly within the way those arrangements were structured that they provided transition protection after the Province of Newfoundland went out of equalization.
I believe a similar arrangement was in place in Alberta for a brief period when it may have collected equalization. I'm not sure about that, but it would be worth checking. I could check for you, if you like. Anyway, it's very much within the workings of the 1985 accord that it provides transition protection for a period of time after the province goes out of equalization.
Conservative
Dean Del Mastro Conservative Peterborough, ON
So am I correct in saying this will sunset at some point?
Director, Federal-Provincial Relations and Social Policy Branch, Department of Finance
Yes. November 20, 2012.
Conservative
Dean Del Mastro Conservative Peterborough, ON
In the interim there's been some suggestion publicly that this province has somehow been negatively affected. It seems to me, and you can correct me if I'm wrong, that about 40% of the total federal tax dollars are raised from the Province of Ontario, either through personal taxes, corporate taxes, what have you—that's roughly where about 40% of the taxes come from. Any amount in the offset that is paid...wouldn't I be correct in assuming that about 40% of that would have to come from the Province of Ontario, a have-not province under equalization?
Director, Federal-Provincial Relations and Social Policy Branch, Department of Finance
That's a very rough kind of equivalence.
Director, Federal-Provincial Relations and Social Policy Branch, Department of Finance
All other things equal, more or less you're.... Yes.