Mr. Speaker, I would like to note at the outset that I will be sharing my time with the member for Yellowhead. Over the last number of months, he has taken over the responsibility of chairing the finance committee.
I want to take a moment to compliment him for the work he has done in chairing the committee. It is a very important committee here in the House. He has done an excellent job of making sure that we stay on track with respect to government business. I think he is doing a very good job in a very non-partisan way.
We have already heard today about how the government is taking steps to improve the fragmented, inefficient system of securities regulation currently in place in our country. We have outlined an approach that will reduce costs and boost efficiency while giving all regions of our country a meaningful voice along the way.
It is important to note, however, that while the government is working to strengthen securities regulation in our country, this is only one aspect of what we are doing to create a competitive advantage in a global marketplace. Allow me to briefly describe in more detail the government's long term strategy to achieve just that.
We heard the previous speaker mention the International Monetary Fund. The International Monetary Fund concluded a month ago in its financial sector assessment program update that Canada boasts one of the most highly developed and sophisticated financial sectors in the world. It noted that our financial system is solid and that Canadian banks and other financial institutions are sound and well capitalized.
The IMF pointed this out in their report and noted that, while the Canadian banking system appears sound, we face some challenges ahead in the midst of global financial turmoil. I note that the IMF has strongly recommended a single securities regulator as a way to make Canada's system better.
Indeed, the former managing director of the IMF has been quite public in his support of the government's call for securities regulation reform. Last June, he said:
Given that Canada is playing in the highest league, you should equip yourself with the best instrument. I think that on financial issues you still have to provide your customers--your investors and savers of your country--with better tools....
The design of markets and the flexibility of markets and the competition of markets is a very important element of public policy. Canada is currently the only G7 country without a common securities regulator, and Canada's investors deserve better.
Our government recognized very early on that to encourage a stronger and more prosperous economy we must improve Canada's capital markets at the same time. That is why in our long term economic plan, “Advantage Canada”, we emphasize the need to create a competitive advantage in global capital markets.
In budget 2007 we announced the blueprint to achieve this in the “Creating a Canadian Advantage in Global Capital Markets” plan. This plan offers increased protection in opportunities for investors, better jobs, more investment and greater prosperity.
It is based on four fundamental building blocks.
First, it proposes a modernization of the fragmented and complex laws that govern our securities markets. It proposes a new principles-based approach to securities regulation, tailored to the unique makeup of Canada's capital markets.
Second, it recognizes the need to protect the investments of Canadians by providing the highest standards of corporate governance, enforcing our laws vigorously, and tackling white collar crime. It is important that strong enforcement be visible to investors, as this perception reinforces investor confidence and encourages increased participation in our markets.
Third, there is a recognition of the need for better access to investment opportunities. Competition and choice for businesses and investors will be enhanced by measures that improve access to global capital markets and complement the effective functioning of domestic securities markets.
Finally, the government is working to ensure that Canadians have the financial literacy and information they need to make sound financial decisions for their companies and their families.
It is an ambitious plan, and it is less than a year old, but this government, as it is in so many other areas, is already delivering results.
On enhancing regulatory efficiency, the government has launched the expert panel on securities regulation, of course, but we have also revised Canadian insolvency legislation to better protect “securities financing agreements” in case of insolvency. In addition, we have taken the time to take a step back and we have consulted with the provinces on security transfer laws.
On strengthening market integrity, the government appointed a senior expert adviser to assess the effectiveness of the RCMP-led Integrated Market Enforcement Teams. The report was published in December. The RCMP and other federal partners have already begun implementing its recommendations. We have also participated in the federal-provincial-territorial securities fraud working group of police, security regulators and prosecutors.
On creating greater opportunity for businesses and investors, a great deal has already been achieved. We have adopted measures that will reduce borrowing costs for Canadian businesses and make cross-border capital flows much more efficient, including the signing of a new protocol amending the Canada-U.S. tax treaty and changing tax rules to remove the withholding tax on arm's-length interest payments made to non-residents.
We have also amended tax rules for investments in securities listed on prescribed stock exchanges. This will improve responsiveness to market and regulatory developments.
Finally, we are pursuing a number of initiatives to improve the information available to investors. This includes working with British Columbia to adapt its high school financial literacy program into a web-based instrument available across our great country.
Our government has also supported the work of the Financial Consumer Agency to improve financial literacy in Canada.
We have no intention of abandoning any efforts to make Canada's capital market systems work better and to give Canadians greater investment choice, increased market access and improved investor protection by doing so.
Even the Toronto Star has underlined the importance of securities reform in our country, stating in a pointed editorial that Canada's current system was “fragmented”, leaving investors with “no assurance their rights will be enforced on a consistent and fair basis wherever they invest”.
Allow me to go on. The current system, the Star contends, has made it “harder and more expensive for firms to raise needed investment capital here at home”. Because Canadian companies can go elsewhere to raise capital more cheaply and with less fuss, they do.
The Star report goes on to say:
And that means Canada is losing opportunities and business to financial centres like New York and London, all because there is no place for provincial parochialism in today's global capital market.
Canada needs a single, national securities regulator...Corporate Canada knows it. Investors know it. It is high time [with all due respect] the provinces caught on.
We have the right plan to make that happen and the determination to follow through on that plan.
This motion is simply wrong. It has no place in our country's economy and it has no place passing here in the House of Commons.