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House of Commons Hansard #133 of the 35th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was finance.

Topics

Indian Act Optional Modification ActGovernment Orders

6:55 p.m.

Bloc

René Laurin Bloc Joliette, QC

Mr. Speaker, members of the Bloc Quebecois will vote no.

Indian Act Optional Modification ActGovernment Orders

6:55 p.m.

Reform

Jack Frazer Reform Saanich—Gulf Islands, BC

Mr. Speaker, Reform Party members present will oppose this motion.

Indian Act Optional Modification ActGovernment Orders

6:55 p.m.

NDP

Len Taylor NDP The Battlefords—Meadow Lake, SK

Mr. Speaker, New Democrats in the House tonight vote no.

Indian Act Optional Modification ActGovernment Orders

6:55 p.m.

Independent

Gilles Bernier Independent Beauce, QC

Mr. Speaker, the member for Beauce will vote yes.

Indian Act Optional Modification ActGovernment Orders

6:55 p.m.

Liberal

Jag Bhaduria Liberal Markham—Whitchurch-Stouffville, ON

Mr. Speaker, I will be voting against the motion.

(The House divided on the motion, which was agreed to on the following division:)

Indian Act Optional Modification ActAdjournment Proceedings

7 p.m.

Liberal

Andrew Telegdi Liberal Waterloo, ON

Mr. Speaker, the establishment of a national securities commission is an idea that has been around for close to 30 years, but until recently there has been little progress.

The issue has become more prevalent in recent years because of the ever-changing nature of investment and trade. This is the era of the globalization of trade and Canada must remain competitive. To do so, Canada must facilitate market investment. If we cannot

encourage investment we will lose our competitive edge in the broader global market.

In recent years, Canada has witnessed the creation of conglomerates in the financial industry. This has generated a dire need for regulation and, if this does not occur, Canadian investment will suffer severely.

Unlike most other countries, Canada has a securities commission in each province and territory. This requires a company to go through the same procedure numerous times. A company wanting to sell shares in several provinces must gain approval from the securities commission in each one. This requires the company to file both its prospectus and disclosure many times. It is tedious and expensive, creating a great deal of uncertainty and duplication.

Companies are also discouraged by the different standards of the various provincial commissions. This complicated situation has resulted in companies opting for the single filing system in the United States. Many Canadian companies are choosing to file on U.S. exchanges such as NASDAQ. This is precisely how the numerous provincial commissions hurt the Canadian investment market. Costly duplication and differing standards discourage Canadian companies from listing on Canadian exchanges. Canadian exchanges are losing high quality companies to other countries.

Because of the current situation, I have seen Canadian companies that were funded by Canadian research grants using Canadian graduates, Canadian expertise develop a new technology that become a commercial success by going to a U.S. exchange to raise capital. We have the ridiculous situation now where Canadian companies are encouraged to become foreign companies and to move their operations outside Canada, denying jobs to Canadians. This must be stopped.

Why is it that the management of Canadian exchanges generally favour a national commission and the provinces do not? This is not a political question but an economic one which must be addressed.

The solution to this problem is to create a centralized agency which can increase efficiency, standardize regulation and reduce the costs involved in investment. The current system is not good enough. Canada risks losing much of its high quality investments to the United States if it does not facilitate these companies.

As the member for Waterloo riding, I am particularly concerned with this issue because of its important impact on my community. Waterloo is a member of the Canadian technology triangle and is an important contributor to Canada's profile on the global market. Waterloo companies are extremely dependent on their investment potential throughout Canada.

We must encourage the Canadian economy through every means possible. This would entail a transition from the provincial securities commissions to a centralized national commission which would be more efficient and less costly.

This is not a political question but an economic one. Our economic interests are at stake. If Canada is to remain a forerunner in the global market, we must facilitate investment interests in a national securities commission.

Indian Act Optional Modification ActAdjournment Proceedings

7 p.m.

London West Ontario

Liberal

Sue Barnes LiberalParliamentary Secretary to Minister of National Revenue

Mr. Speaker, I would like to thank the hon. member for Waterloo for his question on the Canadian securities commission initiative.

The federal government became involved with the Canadian securities commission initiative as a result of the request from provinces. The objective is to improve on the existing system of securities regulation in Canada whereby the capital market participants have to deal right now with up to 12 different regulators. We are prepared, at the federal level, to facilitate the process.

Regulatory duplication creates uncertainty and adds to the cost of raising capital in Canada. It may be motivating some Canadian companies to raise capital in other markets. It may also be deterring some global issuers from selling their securities in Canada.

For some months now, federal and provincial officials have been developing a memorandum of understanding which would set out the possible parameters of a Canadian securities commission. We have been talking about a voluntary arrangement whereby participating provinces would delegate the authority to regulate securities in their jurisdiction to the Canadian securities commission. Provinces who do not wish to participate will continue with their existing securities regulations.

We are talking about a regime with one set of rules applied across all participating provinces, a single agency with a number of regional offices capable of providing one-stop service yet at the same time maintaining the strengths of our regional capital markets.

Work on the memorandum of understanding has now been completed and it has been forwarded to the provinces for their response.

While we believe that a Canadian securities commission would make an important contribution to the efficiency of Canadian capital markets, the decision to proceed further with the establishment of a Canadian securities commission rests with the provinces.

The Minister of Finance has asked the provincial ministers responsible to respond in the very near future regarding their interest in proceeding. If there is sufficient interest, a process will be established to ensure the timely implementation of a Canadian securities commission.

I hope this responds to my hon. friend's question.

Indian Act Optional Modification ActAdjournment Proceedings

7:05 p.m.

Liberal

Bill Graham Liberal Rosedale, ON

Mr. Speaker, I rise to speak on the matter of a question I asked the Minister for International Trade on October 23 about Canadian exports. In the minister's response to my question, he made two points that I thought were very important.

The first point was that our merchandise exports are sufficiently high in terms of the surplus over our imports to counteract what has previously been an unfavourable balance for us in invisible trade. That means our current accounts are now in a surplus position in Canada for the first time in something like 22 years. That is largely due to a lot of aggressive moves by the government which I would like to refer to later. However it is important that the Canadian public focus on the fact that it is not just our exports that are in surplus now, but it is our total current accounts which are in surplus. This is an extremely important development for the Canadian economy.

The second point the minister made was that much of the success in the export market that has been made recently has been due to efforts of small and medium size businesses. The committee on foreign affairs and international trade recently prepared a report on small and medium size businesses and the export trade.

In that report we found that small and medium size businesses are being much more aggressive in areas of export than they had been before. They are becoming familiar with the tools which government provides them with, such as the Export Development Corporation which in turn is working with the banks to enable better financing mechanisms for exports. They are better using our trade commissioner services. They are using team Canada and going on team Canada missions when team Canada goes abroad. They are participating also through their provinces and municipalities in a way to ensure that they have access to exports.

We found something else about small and medium size businesses and their access to exports that is very important for this country. We have a tremendously talented pool of people in the multicultural communities of our country who speak languages other than English and French and who have knowledge of other cultures, business cultures.

In my own riding of Rosedale in downtown Toronto, there are areas where over 50 languages are spoken. I speak to many of these people. Some of them are now forming small and medium size businesses. They are able to export their products to the communities where they came from because they have access to those communities. They know those markets. This is an enormously rich pool for us to develop. This government is to be congratulated on reaching out to that community and seeking to enable it to be effective in these markets.

Finally, the other thing we have to draw attention to in this area is the fact that many of our exports are now directed toward the service industry. Services now represent about 60 per cent of the GDP of modern economies. I am informed that in Toronto over55 per cent of all services are traded services.

A report prepared by the Boston consulting group, sponsored by the Bank of Nova Scotia, shows the importance of the financial services to the Toronto economy.

This is key to the future because these are traded services and therefore require a marketplace within the domestic economy which will enable them to reach out into the international economy. We must be conscious of the fact that we have to make sure that in this country we have an appropriate domestic marketplace that will enable these companies to grow and develop in the service field, particularly in the financial field in modern cities like Toronto, Montreal, Vancouver and other important financial centres.

This means we must focus on ensuring that we have a free market within Canada. We have to perfect our national markets. We have to insure that we are not impeding but helping our financial services providers to be part of the international community as well as the domestic community.

The people from small and medium size businesses who came before us in the committee told us that they are now competing in the domestic economy as well as internationally. We must make sure we have both. In so doing, we must ensure that we have the multilateral as well as the bilateral mechanisms in place.

Finally, in that respect we should congratulate the government on signing the Canada-Chile free trade agreement, which is one more way to ensure that we will have access to those important developing Latin markets which will complement our exports outside of Canada.

Indian Act Optional Modification ActAdjournment Proceedings

7:10 p.m.

Dartmouth Nova Scotia

Liberal

Ron MacDonald LiberalParliamentary Secretary to Minister for International Trade

Mr. Speaker, I am pleased to respond to the comments from my colleague, the hon. member for Rosedale.

I do not think there are many people in the House who are as articulate when it comes to dealing in the realm of foreign policy, both trade and others. There are many times that I seek his wise guidance, as does the minister.

The questions he raises and the comments he made are quite true. This year has been a record year for Canadian exports. Indeed, Canada is now exporting almost $1 billion of goods and services every single working day. We have seen our trade surplus continue to mount over the last few years.

This year the trade surplus has increased by 20 per cent in excess of $34 billion. In the last three years exports have increased by47 per cent. Our GDP as it relates to trade is now at an all time high of almost 40 per cent. Some have put it over 40 per cent. So it is very clear that Canada's success in trade is driving the engine of

recovery. It is the engine which is producing the jobs in the economy and wealth for Canadians.

The member spoke about the importance of the service sector. He is entirely correct. For the last number of years as our trade and our surplus in goods and products has grown, we have lagged behind in services.

I would like to say to the hon. member that according to the statistics that came out today, for the first time in 12 years Canada has posted a surplus not just on the goods side but on the service sector side. That is very positive news for the movement in that sector of the Canadian economy.

The member speaks about the importance of small and medium size enterprises. The government could not agree more. It knows that the continued success of trade abroad will continue and will sometimes be led by large companies. But the success we are most proud of are in the small and medium size enterprises whose people

accompanied the Prime Minister, the minister of trade and other members of Parliament along with me around the globe. They are truly showing the entrepreneurial spirit in the Canadian economy. And this is what will continue to lead in the creation of jobs and growth both domestically and abroad.

Indian Act Optional Modification ActAdjournment Proceedings

7:10 p.m.

The Acting Speaker (Mr. Milliken)

It being 7.15 p.m., the House stands adjourned until tomorrow at 10 a.m., pursuant to our standing orders.

(The House adjourned at 7.15 p.m.)