Finance Committee on May 25th, 2010

[Daniel Paillé, Bloc, Hochelaga, QC]

So all of these people have studied market efficiency. No doubt, they realized that jobs would be lost in Montreal, Calgary and elsewhere in Canada because those positions were being centralized in Toronto.

Have any studies been done on the costs associated with the loss of all the skilled jobs—accountants, lawyers, financial and IT experts—which will be lost at the provincial level once a federal securities regulator has been established? Have there been any studies done on that, yes or no?

[Jeremy Rudin]

Budget 2009 provides a few more details on the plan. It says that the Government of Canada intends to “maintain a high level of local service, and continue to meet the distinct needs of regional markets”.

[Daniel Paillé, Bloc, Hochelaga, QC]

I read Budget 2009. I want to know whether you studied the issue specifically.

[Jeremy Rudin]

It says that “the plan should ensure that the resources of securities regulators from willing provinces and territories are effectively integrated... with the Canadian securities regulator”. So we do not have to study the loss of jobs because it is not included.

[Daniel Paillé, Bloc, Hochelaga, QC]

I see old habits die hard.

In terms of market efficiency, have any studies or empirical analyses been done on the activities of issuers and investors or on the benefit of applying a system that is working well right now instead of a multi-tiered system, if that system were to ever work? Have you done any empirical studies on efficiency, as recommended by IOSCO, the IMF, the World Bank and the OECD, yes or no?

[Jeremy Rudin]

I do not recall the IMF recommending that the issue be studied further. If I remember correctly, the IMF and the OECD both recommended that the Government of Canada move forward with such a plan.

[Daniel Paillé, Bloc, Hochelaga, QC]

When the Toronto Stock Exchange took over The Montreal Exchange, there were basic conditions under which the Toronto Stock Exchange had to satisfy a certain number of requirements.

In this case, what will happen to those basic conditions?

[Jeremy Rudin]

I believe those conditions were established by the AMF. Am I wrong?

[Daniel Paillé, Bloc, Hochelaga, QC]

They were indeed established by the AMF, but also by the Ontario Securities Commission.

[Jeremy Rudin]

The federal government intends to create a national regulator, which will be established through the willing participation of the provinces. If Quebec decides, at least initially, not to participate, the Autorité des marchés financiers will continue operating, and the commitments of private companies towards the AMF will not change.

[The Chair, Conservative, James Rajotte]

Merci.

We'll go to Mr. Wallace, please.

[Mike Wallace, Conservative, Burlington, ON]

Thank you, Mr. Chair.

Thank you for coming this afternoon and answering questions. Normally I would have been able to get you the questions in advance, but since we weren't here last week I wasn't able to do that. I have a few things.

The transfer payments listed here are all formula based, so we just redid some of the formulas. Is that not an accurate statement?

[Chris Forbes, General Director, Federal-Provincial Relations and Social Policy Branch, Department of Finance]

They are, I think, all formula-based or statutory. The one large one that is not formula-based would be the transitional assistance for the harmonized tax, but the rest are formula-based.

[Mike Wallace, Conservative, Burlington, ON]

That's a one-time expense with the provinces that are...?

[Chris Forbes]

Yes, it's one time with the provinces--

[Mike Wallace, Conservative, Burlington, ON]

If the rest of the country comes on board, then there'd be future expenses we'd be looking at? Is that correct?

[Chris Forbes]

There would be further if additional provinces come on board.

[Mike Wallace, Conservative, Burlington, ON]

Right. Okay.

For the establishment of the Canadian securities regulation you've got the $150 million in there. Is that a place mark? Is that going to cost the taxpayer more money over time? Have we had it in previous budgets and we're just saving for it? What's the scoop on that?

[Jeremy Rudin]

The $150-million item was established in the Budget Implementation Act for 2009, which states that “The Minister of Finance may make direct payments” up to an amount “not exceeding $150 million to provinces and territories for matters relating to the establishment of a Canadian securities regulation regime....”

So these are payments that the total amount that the minister is authorized to pay--

[Mike Wallace, Conservative, Burlington, ON]

To provinces.

[Jeremy Rudin]

--to participating provinces and territories should the need arise.

The--

[Sherry Harrison]

The International Development Association is the arm of the World Bank that provides financial assistance to the world's poorest countries and is financially replenished by donors every three years.

For IDA's fifteenth replenishment in 2008, Canada pledged a total of $1,152,800,000 to be paid in three annual installments.

[Mike Wallace, Conservative, Burlington, ON]

Thank you. So is this the second installment or third?

[Sherry Harrison]

This would be the second.

[Mike Wallace, Conservative, Burlington, ON]

The second. Thank you.

The purchase of domestic coinage, I'm assuming, is paying the Mint to print coins. Is that correct?