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.