Thank you, Mr. Speaker. It is rather unusual to see a whip get involved at this stage.
I was mentioning the powers given to the Bank of Canada regarding clearing and settlement houses. Let me quote the brief recently submitted by the Quebec securities commission: "The powers given to the Bank of Canada regarding the clearing and settlement system would constitute an infringement on the authority given by the Quebec legislator to the securities commission. Most of the powers given to the Bank of Canada are a replica of those delegated to the Quebec securities commission more than 10 years ago. The only difference is that the Bank of Canada's authority, as provided in the schedule to Bill C-100, is based on a desire to control the systemic risk by invoking the national interest, while the authority of the commission relates to the overall market regulations".
If we look at the bill, we see, given the schedule and the new powers delegated to the Bank of Canada, that the bank, through its authority to give directives to a clearing house and a participant, does exactly the same as the securities commission. For example, under Bill C-100, the Bank of Canada would exercise powers which are an integral part of the authority given to the securities commission, such as giving clearing houses and their participants directives akin to an order to do or not do something. Such power is given to the Quebec securities commission through its incorporating act.
"Since the Bank of Canada should be informed of any change in the internal regulations and rules of operation of the clearing houses, this means that it exerts a supervisory power over these changes. The Commission des valeurs mobilières also has the power to approve these modifications. Finally, the Bank of Canada is empowered to inspect clearing houses, which duplicates the power assigned to the Commission". This is a quote from the Commission des valeurs mobilières.
Not only, then, is there encroachment on an area of jurisdiction that belongs exclusively to Quebec, but they have also taken the luxury of creating duplication and overlap in times of austerity budgets, after all we have heard from across the way in that connection. After hearing the Minister of Intergovernmental Affairs, the Prime Minister himself even, saying that action will be taken to reduce duplication and overlap, now we are presented with a bill that does exactly that, creates a double structure, a double role, which encroaches on an area of Quebec jurisdiction, which makes institutions such as the Bank of Canada duplicate the work of others. It is inadmissible and nearly unbelievable on the one hand, and on the other it creates flagrant inefficiency through overlapping of resources in the area of financial institutions.
As for systemic risk, as I have said, we agree with the objective of reducing it. It is a most praiseworthy objective and one shared by all nations throughout the world. It is, however, a false pretext for giving such a broad and powerful mandate to the Bank of Canada, particularly in an area of jurisdiction that belongs exclusively to Quebec, securities.
All that the government could do to reduce systemic risks would be to improve what is called the large value transfer system, by putting into place an electronic clearing system which will ensure the final character of the clearing transaction, and will make it possible to pay out, perhaps not immediately, but within the day. If the Secretary of State is familiar with such a system-and I am not convinced that he is all that familiar with it, judging by the responses he gave to the finance committee, but let us assume his familiarity-this was specifically one of the recommendations by the internationally renowned group of 30. This was precisely what they said in 1989, that it was necessary to implement and perfect a large value transfer system, so as to reduce the systemic risks on the financial market.
This recommendation by the Group of Thirty was so good that the Governor of the Bank of Canada, speaking to members of the financial community this summer before he appeared before the finance committee on August 15, acknowledged that it was enough to improve the large value transfer system in order to reduce, and in fact, if I remember correctly, he did not say reduce, he said eliminate, in referring to the most ambitious risk taking that went on, more ambitious than most people are prepared to undertake. In other words, to eliminate systemic risks, all we had to do was improve the large value transfer system.
There is no need to intrude in the jurisdictions of the Government of Quebec. There is no need to give the Governor of the Bank of Canada extraordinary powers to issue directives to provincial chartered institutions involved in the securities sector. There is no need to create unnecessary friction between the federal government and the Quebec government. All we have to do is improve the large value transfer system. That is all.
So why does it again boil down to encroaching on one of Quebec's jurisdictions? Why give the Governor of the Bank of Canada considerable powers and take away from the Government of Quebec its power to control the development of the securities sector? Why?
Again, I put this question to the Governor of the Bank of Canada on August 15, but I did not get an answer. I asked him about the difference between the speech he made before the finance commit-
tee and the one he made this summer, when he said: "I do not need additional powers; all I need is a better large value transfer system". The debate became very political, and I agreed with the Governor of the Bank of Canada that his role was not that of a politician. However, I think everyone realized that the federal government was again trying to centralize all powers, including prerogatives explicitely recognized under the Constitution Act, 1982.
In fact, as I pointed out earlier, this is not sovereignists against federalists, it is simply a matter of common sense and respecting the prerogatives of Quebec as conferred on the province by the Constitution. So much so that on February 16, 1994, when the federal government's intentions with respect to financial institutions were already known, and the bill was already on the table, not the bill as such but the proposals to invade the securities sector, Daniel Johnson, the Premier at the time who was to be Premier for a short while yet, wrote to the President of the Privy Council and the Minister of Intergovernmental Affairs, the hon. member for Hull-Aylmer, to tell them that he disagreed with the bill.
With your permission, Mr. Speaker, I will quote what he said: "Perhaps I may remind you, first of all that the Government of Quebec has never supported an expanded federal role in the securities sector, which is the exclusive responsibility of the provinces". This is not Mr. Campeau or Mrs. Marois but Daniel Johnson when he was Premier of Quebec. I will continue: "In fact, it has regularly indicated it was opposed"-strong language for Mr. Johnson-"to federal initiatives in this respect, as were several other provinces regarding the recent reform of federal legislation on financial institutions, which came into force in June 1992".
I will continue this quote from Mr. Johnson's letter: "In the quinquennial report she tabled in the National Assembly last December, the minister responsible for finance reiterated Quebec's concerns about the federal bill to regulate the securities sector which would be part of this legislation. She stressed that federal regulations would be inappropriate, both constitutionally and from the point of view of efficiency". This still according toMr. Johnson, a staunch federalist, who in this letter warned the federal government against meddling with the securities sector, which is Quebec's exclusive responsibility.
To continue with the letter from Mr. Johnson, who is still a federalist today: "Such regulations would mean duplicating both existing regulations and the supervision involved and would inevitably add to the administrative and financial burden on issuers, investors and intermediaries". Mr. Johnson goes on to say the following: "If the purpose is to reduce duplication and improve efficiency, it seems to me it hardly makes sense to create a new structure and additional regulations".
As I said before, if the Bloc Quebecois and Daniel Johnson agree, it is because a broad consensus exists in Quebec.
The federal government must amend its bill in order to withdraw from the area of securities which is a field of exclusive jurisdiction for the Quebec government. This is the unanimous feeling in Quebec. It must not invade this area. It must not give the Governor of the Bank of Canada and the Minister of Finance new powers to issue directives not only to clearing houses, but also to participating institutions or establishments.
It must not give the Governor of the Bank of Canada powers to issue directives to the Fiducie Desjardins, for instance, or Lévesque Beaubien Geoffrion and Leclerc, or the Caisses centrales Desjardins. This is none of its business. This is the Bloc's position in this matter.
The Quebec finance minister is still waiting for an answer to a letter he sent the Minister of Finance on August 15. No abuses. The Quebec government does not need the kind of abuse it got from the Minister of Finance the day after he received the letter. All the Quebec government wants is explanations, assurances and changes to Bill C-100.
To this day, these basic requests have remained unanswered on the part of the federal government. This is not normal, especially since federalists claim to be open to reforms and willing to foster greater harmony between Quebec and the federal government, and eliminate inefficiencies and duplications. Between words and actions, there is a big gap, not to say a huge discrepancy.
There are two other aspects of the bill which annoy the official opposition. The second aspect of Bill C-100 with which Quebec has a serious problem is clause 133, the clause dealing with the Winding-up Act. The notion of insolvency is broadened-we acknowledge that it is an area of exclusive federal jurisdiction-but by widening it, once again the federal does not take into account the role of a major player in Quebec, namely the inspector general of Quebec financial institutions.
I can hear them laughing and mocking on the other side. This is the kind of reaction we have been getting for the last month whenever we tell the truth. the pretence of wanting to increase stability and reduce uncertainty in the financial sector, they added a player and thereby added the possibility for dispute by institutions which could be found wanting by Quebec's Inspecteur général des institutions financières.
That opens the door to disputes which could go all the way to the Supreme Court. Let me give you an example. If the inspector general sees that an institution is not fulfilling its obligations and issues directives that it must follow, and then that institution, given the new bill, the new provisions respecting the Winding-up Act, decides to ignore these directives, it will have the possibility to do so because the bill adds some ambiguity, it adds another player
whose objectives and powers are exactly the same as those of the Inspecteur général des institutions financières.
Therefore, they say they want to increase the predictability of the financial market, that they want to eliminate uncertainty and reduce systemic risk, but they are adding another element which could interfere with the decisions and the orientations of Quebec's Inspecteur général des institutions financières.
If that is what they mean by reducing uncertainties, increasing stability, we are no longer on Earth. We are on another planet. With this bill, the federal government is stretching the notion of insolvency, it is creating uncertainty on the financial market and ambiguity in the evolution of institutions in the financial sector which could adversely affect the proper operations of these institutions.
This will not improve anything, this bill does not propose improvements. What the bill proposes, I tell you, is quite harmful. At a time when financial institutions, as everybody knows, need stability and certainty, a federal bill is adding uncertainty to the market. It is adding a nebulous provision which will deny the Quebec Inspecteur général des institutions financières his exclusive role, his directives will no longer be exclusive. Which directives will financial institutions abide by? Those of the Quebec inspector general or those issued by the federal government under Bill C-100?
The financial sector can do without such ambiguous situations. It is hard enough to manage in this sector without possible challenges over the role of the Quebec Inspecteur général des institutions financières and without added uncertainty.
There is also a third aspect of the bill which raises questions, and this will be my last point. It is on page 11 of the bill where it says: "from now on, premiums payable to the Canada Deposit Insurance Corporation will be based on a risk factor assessed by the institutions". The principle may be excellent, but once again, they are disregarding a Quebec institution in the area of securities called the Régie de l'assurance-dépôt du Québec, which did not consider necessary to implement this kind of system and was never consulted on the rating system that the federal government is trying to implement through the Canada Deposit Insurance Corporation.
We have mixed feelings about this new rating system which will set the rate which will apply to a given institution following a risk analysis. Let us take for example Fiducie Desjardins; it is just an example, but let us take this one. About 95 per cent of its deposits are from Quebec and only 5 per cent from the rest of Canada. With this bill, the Canada Deposit Insurance Corporation would be empowered to give Fiducie Desjardins a bond rating on 5 per cent of its deposits on a Canadian basis. It would issue a rating on only 5 per cent of its deposits.
By issuing a rating on 5 per cent of deposits, this rating becomes a signal for all financial markets, including in Quebec. This signal can be as private as the one given by ratings from agencies such as Moody's, Standard & Poor, Dominion Bond Rating and Canadian Bond Rating. If this rating becomes public-and there is a risk that it will-, that would mean that Fiducie Desjardins, which would have been rated according to the risk associated with 5 per cent of its deposits, would be given this rating for all its deposits. In other words, that would become a risk signal for 100 per cent of Desjardins' deposits. And that risk is very real.
These are the three aspects that I wanted to underline and for which we did not get a satisfying answer from the government when Bill C-100 was tabled this summer. We hope that the analysis that the official opposition has just made will result in valuable answers from the government and that, when Bill C-100 is examined clause by clause, the government will propose amendments to assure us that, first of all, Quebec's exclusive jurisdiction, that is its securities sector, will be respected.
Second, that no extraordinary powers be granted to the Governor of the Bank of Canada just to reduce the systemic risks of issuing guidelines to the clearing houses and the participating institutions. So, that no new powers be granted that would directly infringe upon the powers of the Quebec Securities Commission.
We should also get rid of the new role given to the Deposit Insurance Corporation that could lead to an increase in financial market concentration and also to a rating that would apply to all deposits made in Quebec institutions, but not to the deposits made elsewhere in Canada.
Third, that the extension of the concept of insolvency should not be used to disregard the role of the superintendent of financial institutions in Quebec.
So, these are the three provisions that bother us and we will try hard to urge the government to amend them. We hope that the government will respond to these three objections made not only by the official opposition, but also by the Government of Quebec and even the leader of the opposition at the National Assembly, Daniel Johnson.
If the government does not amend the bill in this manner, we shall move, during clause by clause consideration of the bill, some amendments to Bill C-100 that will meet respond to these objections.