Thank you, Mr. Chair.
I would first like to thank the Standing Committee on Finance for inviting the Autorité des marchés financiers to participate in your study of Bill C-60.
This afternoon, I would like to present our position specifically on section 133 of this bill. This section would indefinitely extend the mandate of the Canadian Securities Transition Office.
This office's mission is to promote establishing a national securities regulator in Canada. The office's activities are to come to an end in July. The Autorité des marchés financiers takes a clear stand on extending the Canadian Securities Transition Office mandate, we believe this extension is inappropriate.
In its December 22, 2011 ruling, the Supreme Court of Canada concluded that regulating securities is a matter of provincial jurisdiction according to the Constitution. Consequently, there are simply no grounds for extending the Canadian Securities Transition Office's mandate in order to create a national securities regulator that would involve the federal's government participation.
Beyond the constitutional issues, it is also important to note that currently the provinces are adequately regulating securities. In fact, we are convinced that creating a national securities regulator would be a step backwards from the current system. Creating a national regulator would inevitably standardize regulations, possibly on the basis of the interests of the sizeable market in Ontario.
However, securities markets in Canada are markedly different from one region to another. In order to be efficient and effective, the regulatory framework must acknowledge the differences. The current system does a very good job of this. It allows for a high level of harmonization while taking into account, when necessary, the specific needs of each region.
On the administrative front, over the last few years the provincial regulators have implemented a securities passport system. The system allows securities issuers looking for financing in a number of provinces to do so by communicating solely with the provincial regulatory authority where their headquarters are located. This system is efficient, effective and fast. It is not a costly collage as the promoters of a national regulator would say.
Overall, the provinces provide quality regulations of securities in Canada. A number of international studies confirm this. For example, the World Bank recently ranked Canada 5 out of 175 countries when it comes to protecting investors. The Organization for Economic Co-operation and Development, the OECD, ranked Canada second for its quality of securities regulation. In this context, one may want know why the federal government is seeking to change a system that works well.
That being said, as the Supreme Court of Canada's decision reminds us, the federal government has a role to play in maintaining the stability of the financial system. This role is significant in the current international financial and economic environment. However, rather than try to interfere with securities and taking the risk of provoking more costly and unproductive legal challenges, I humbly suggest that the federal government focus its efforts on strengthening the cooperation between the different financial regulators while respecting their constitutional responsibilities.
The provincial ministers in charge of securities, with the exception of Ontario, recently asked their regulators if they had suggestions on how to improve the governance and operations of the Canadian securities administrators.