Mr. Speaker, I am pleased to rise today at third reading to speak to Bill C-15, an act which concerns several acts regarding financial institutions and the banking sector.
This bill concerns the Bank Act, the Trust and Loan Companies Act, the Insurance Companies Act, the Cooperative Credit Association Act, the Winding-up and Restructuring Act, the Office of the Superintendent of Financial Institutions Act, the Canada Deposit Insurance Corporations Act, the Canadian Payments Association Act, and the Canadian Investment Companies Act.
This is a wide-ranging piece of legislation. This is a preview of the major changes the Liberal government is getting ready to make to the Bank Act before March 31, 1997.
It is also, first and foremost, a bill that gave us a general idea, as early as June, as my colleague from the finance committee already said, so that when we began the clause by clause study of the bill in August, we had some indication as to the government's intentions. And these indications were confirmed, a few weeks ago, when the government made its intentions known in the throne speech and the budget speech.
With this bill, the government is intruding, roughly and high-handedly, in an area which comes exclusively under the jurisdiction of Quebec, Ontario, and all other provincial governments. The area I am talking about is that of securities.
With the single clause extending the regulatory mechanisms to the securities sector and implementing a Canadian clearing system controlled by the Bank of Canada, the government is betraying the 1982 Constitution. Not only did the government patriate the Constitution against Quebec's will, but now it does not even abide by the provisions of that Constitution any more.
Quebec's jurisdiction over securities is based on section 92(13) of the Constitution Act, 1982, which grants provinces jurisdiction over property and civil law. What complements these provisions? It is the case law of the Supreme Court of Canada, which has attached the securities market to this initial area of jurisdiction, through the provinces.
So, when we look at what is presented to us, when we look at the clearly defined intentions set out a few weeks ago in the throne speech and in the budget speech regarding the total and complete intrusion of the federal government in the securities sector, we can only confirm our opposition to this provision of the bill.
It is not that the bill's objectives are bad. The bill is aimed at, among other things, reducing what are known as systemic risks in the Canadian financial system, to avoid the so-called domino effect in the financial sector that would occur, for instance, when one institution is unable to meet its commitments towards another institution. There would be a domino effect on the financial sector as a whole. Everyone, sovereignists as well as federalists, Quebecers as well as Ontarians, people from the maritimes or from western Canada, agree on that: we must put in place a system that is efficient and that reduces the likelihood of a financial crisis and of systemic risks in the financial sector.
But we must totally reject the means taken by the government. When the government, under the pretext of reducing systemic risk, creates new and costly overlap for taxpayers as a whole-new overlap that Quebecers as well as Canadians will have to pay for-because it intrudes in a sector that is already very well served by provincial institutions, there is a problem.
The Commission des valeurs mobilières du Québec and the Ontario Securities Commission are completely disregarded and, through this bill, the federal government is allowed to interfere more and more in this area under the provisions of a bill enabling the Governor of the Bank of Canada to seriously interfere in this area. At the same time, there is talk of creating a Canadian securities commission, as mentioned in the speech from the throne but not in the bill. This will not do.
How can you justify having provincial and federal institutions that overlap like that? How do you expect to give a clear signal to the financial community?
Which policy directives should financial institutions in Quebec and Canada follow? Those coming from a federal entity, as set out in Bill C-15, or those coming from organizations and institutions already well-established in the securities industry, such as the securities commission, the Quebec inspecteur général des institu-
tions financières, the Quebec government or even the Montreal stock exchange?
How do you hope to create stability in this area when, by interfering this way, although such interference is allowed under Bill C-15, you are sending out potentially conflicting signals to the same institutions? That does not make sense.
What justifies the federal government in telling the Government of Quebec and the Government of Ontario: "We have decided to cast aside the institutions you are involved in, even though you have successfully controlled the securities industry for many years. In the future, we will be in charge". The federal government has no expertise in the area of securities since, under the very terms of the Constitution Act of 1982, this is an area that falls under provincial jurisdiction.
The second aspect of Bill C-15 that we cannot support has to do with using this bill to amend the prerogatives of the Superintendent of Financial Institutions and the Winding-up Act. Bill C-15 gives more powers to the Canadian Superintendent of Financial Institutions, who, in the future, will be able to interfere directly in the business of provincially chartered institutions.
Such an extension of the prerogatives of the federal superintendent of financial institutions will result once again in costly duplication and inefficiencies in the system. On the one hand, according to the legislation and the remarks made by the minister and the parliamentary secretary, they want to introduce efficiency and reduce duplication, but on the other hand, they create duplication and inefficiencies with such a provision. Why? Because, once again, the Quebec inspector general of financial institutions as well as his Ontario counterpart are doing exactly the same work and have exactly the same responsibilities as the ones the government wants to give to the superintendent of financial institutions of Canada.
Why this duplication? Why create new structures when we should instead eliminate duplicating structures? When we ask the government to study and review duplication and overlap, we are not asking it to create some more but to eliminate what there is. Yet, with this legislation, it is creating more, with all the resulting additional costs to taxpayers and all the resulting problems in terms of signals on the securities market.
I believe Bill C-15, through this provision as well as the first one, will inevitably create instability and uncertainty on the financial markets. Contrary to what the government representatives say, I do not believe that stakeholders in the securities industry all across Canada generally want the federal government to get involved in that area, that they want it to set up a securities control commission or that they want that the federal superintendent of financial institutions to push aside the provincial officials working in this area of exclusive provincial jurisdiction in favour of federal authorities.
That is not the message I am getting from the financial sector, and more particularly from Quebecers and some Canadians in these institutions.
In the last fifteen years, I would say, provincial participantsin the securities sector have developed a great deal of expertiseand knowledge in this field. But most importantly, they have introduced a harmonizing mechanism in order to reduce systemic risks, and bring about efficiency gains in the securities sector. With the new SEDAR system, they will soon be able to reduce from eight or ten to only one the number of prospectuses required. That will make for a better allocation of funds available on this market, and a better use of financial resources on the securities market.
So why has the federal government chosen this time to introduce such a piece of legislation? Under the pretext of reducing the systemic risks that have already been reduced thanks to measures taken 10 or 15 years ago in this area, the federal government does not hesitate a minute to say: "From now on, I will oversee the securities industry and ensure that resource allocation is efficient". That is unacceptable.
You either believe in a constitution, as the Liberals tell us, or you do not. You either believe in the stability of our financial industry or you do not. You either believe in a better allocation of all the risks involved, and especially of systemic risks, or you do not care at all. And that is the impression we get from the actions of the current government.
When the only thing you do is increase the tension, the insecurity and the instability on the market, instead of reducing them, you either do not understand what is going on, and that shows how incompetent you are, or you want more powers or more visibility for the federal government. You are ready to give up efficiency in order to be more visible and that is not good. That is not what you need to do if you want to be up to the challenges awaiting you in the securities industry and the financial sector during the nineties and the year 2000.
The third reason why we cannot support Bill C-15 introduced by the government concerns the amendments to the Canada Deposit Insurance Corporation Act. Bill C-15 proposes to change the current deposit insurance system. Right now, financial institutions pay deposit insurance premiums based on the volume of deposits, but under Bill C-15, premiums will be based on the risk that a financial institution represents.
Since first seeing the provisions of Bill C-100, which is now Bill C-15, last June, we have been questioning the secretary of state responsible and the finance minister who, ultimately, is also responsible for this legislation, about the impact of this new provision. Up until now, that is almost nine months after the first bill was introduced, our questions have yet to be answered.
For example, we do not know what criteria will be used to assess the risk that a financial institution represents. These criteria will be defined in the forthcoming regulations, and the government refuses to make these regulations public. One can wonder if these criteria will respect the specific character of Quebec's financial institutions. We have questioned the secretary of state responsible and the finance minister many times on this subject, but we still have no answer. We have no answer either to a question such as what impact will a federal risk assessment as proposed in Bill C-15 have on the financial community and how will this risk assessment be interpreted by the financial markets.
On the one hand, there is talk of interference, inefficiency, waste, duplication, overlap, all costly to Canadian taxpayers, and on the other hand, when a clause is unclear and we ask for clarifications, we get no reply. What kind of government are we dealing with here?
In short, this bill is another illustration, first and foremost, of the centralist dynamic inherent in the constitutional status quo. Bill C-15, particularly in its creation of Canada-wide clearing and settlement systems, encroaches on areas already covered by the Commission québécoise des valeurs mobilières and the Inspecteur général des institutions financières du Québec. This leads not only to an overlap that is costly to the taxpayer, but also to administrative inefficiencies, because financial institutions in Quebec, as in Ontario and the other provinces, will be subject to dual controls.
Second, Bill C-15 constitutes unacceptable interference in the securities area. The various governments of Quebec have always vigorously defended the prerogatives of Quebec concerning securities.
If I may, I would like to quote from a letter dated February 16, 1994, and addressed to the then President of Queen's Privy Council for Canada, Minister of Intergovernmental Affairs and Minister responsible for Public Service Renewal by former Quebec premier Daniel Johnson. Its subject is securities, for even that long ago the federal government had indicated its great interest in securities.
The letter starts as follows: "Mr. Minister, as I indicated in my letter of February 15 on the entire process of improving the efficiency of the Canadian federation, this letter more specifically concerns your proposal regarding the regulation of securities".
Mr. Johnson goes on to say: "Allow me first to remind you that the Quebec government never advocated-never advocated-an increased federal role in the securities sector, which is a matter of exclusive provincial jurisdiction. On the contrary, it has consistently expressed its opposition to federal initiatives in this regard".
These are not the words of the current premier of Quebec, of either Mr. Bouchard or Mr. Parizeau. They are the words of Daniel Johnson, written from one federalist to another.
He goes on: "In her five-year report to the National Assembly last December, the Quebec Minister of Finance, reiterated the concerns about the federal regulation of securities that would result from this legislation expressed by a number of other provinces at the time of the recent reform of federal legislation on financial institutions. She said-and we are talking about a current federal minister-that federal regulation would be inappropriate in constitutional terms and from the standpoint of efficiency. It would lead to duplication of rules of supervision and inevitably to a heavier administrative and financial burden for issuers, investors and intermediaries". End of the letter from Daniel Johnson to the current President of the Queen's Privy Council for Canada.
When you are reduced to quoting letters from federalists- It seems to me that the analysis presented by a federalist to another federalist should be understood. It seems just an excuse to say: "We know, you are a sovereignist. You want Quebec to be sovereign. You refuse all interference. You fight against all interference". Yes, it is our job to do so, and I think Quebecers are proud of that. But when one comes out with implacable arguments, the same as those used by great federalists such as Daniel Johnson, it seems to me that somehow the Liberal government should realize that there is a certain consensus in Quebec. Moreover, I think they are starting to get the picture as far as the homeland and the linguistic community are concerned. They should also understand that there is also a strong consensus to jealously protect Quebec's prerogatives concerning securities.
I also think that it should be easy to understand, when the president of the Montreal exchange himself tells us he does not agree either with the idea of federal interference in securities. As well, when we questioned the Minister of Finance, after the speech from the throne, and all the more so after the budget speech, in which he mentioned the federal government's intention, now openly admitted, to interfere in matters of securities, he told us the Quebec business community, major stakeholders in Quebec were unanimous on the need for federal interference in the securities market. After hearing several stakeholders, and the Montreal exchange's president for one, we have to conclude that the Minister of Finance has no idea what he is saying in this regard.
Let me quote Mr. Lacoste, the Montreal exchange's president, when he appeared, on February 20, before the Senate Standing Committee on Banking and Commerce.
Concerning a better harmonization among provinces and greater efficiency in the stock exchange, Mr. Lacoste said, and I quote:
"Yes, there must be better co-ordination, but better co-ordination must still allow for regional disparities. I always use the example that if we had a national or a single commission in Canada in the 1980s, there would not have been a QSSP type of program. There would not have been labour sponsored funds in Quebec. Now they exist, so there is a need to preserve that. However, I agree there must be better co-ordination".
Clearly, with such significant arguments, Mr. Lacoste, the president of the Montreal exchange, has just told the federal government in polite but firm terms to stay home. He has just told the federal government to mind its own business, not to interfere with the securities business.
I believe that when the president of the Montreal exchange says such a thing, adding that if it were not for the fact that the 1982 Constitution gave the Quebec government exclusive jurisdiction with regard to securities, we would not have had workers' funds such as the Fonds de solidarité des travailleurs et travailleuses de la FTQ, because there would have been a coast to coast policy, and major lobbies and decisions would have been increasingly concentrated in the Toronto area, he is contradicting in a big way what the finance minister has been saying so far.
There is definitely no consensus in Quebec to the effect that the federal government must interfere in this area. Indeed, there is a consensus in Quebec that the federal government should stay where it is, deal with its own affairs, and not create costly inefficiencies, overlaps and duplications for the taxpayers of Quebec and Canada.
This being said, and considering that the government did not respond in any way to our expectations, since it refused to accept any of the amendments we proposed, to avoid three of the negative aspects of the bill, I have to ask my colleagues from the official opposition to vote against this bill. We will do so with energy and conviction, and then start working against it, given that the federal government has firmly decided, first in June last year and then with the speech from the throne and the budget provisions, to interfere in a very cavalier and cynical way in the area of securities.
I am convinced that, over the next few weeks, the main stakeholders in Quebec, just like the official opposition, will oppose vigorously this interference by the federal government.