Mr. Speaker, I can assure the member for Montmagny—L'Islet—Kamouraska—Rivière-du-Loup that my career aspirations are here as Minister of Finance of Canada.
I am pleased to have this opportunity to comment on this important issue dealing with the best way forward in terms of securities regulation in Canada.
This motion brought forward by the Bloc does not meet the real challenge facing Canada today, which is a great challenge with respect to securities regulation in Canada. This issue needs to be addressed to protect our capital markets and to protect Canadian citizens. This issue is all the more urgent, given the turbulence that we have in capital markets globally today.
Our government believes that we must modernize our securities regulatory framework. This is a priority and an important component of strengthening our economic union in Canada.
That is why the government recently announced the creation of an expert panel to provide advice and make suggestions and recommendations concerning securities regulation in Canada.
This expert panel, chaired by the hon. Tom Hockin, will provide independent advice and recommendations to federal, provincial and territorial ministers on the best way forward to improve securities regulation in Canada. We look forward to a collaborative effort with the provinces and territories to build an even stronger Canadian economic union.
Our government has a good reason for taking action on this front. Canada has a strong financial services sector, one that spans the country from coast to coast to coast providing good, high-paying jobs for Canadians. There is no doubt that Canada has a great story to tell, one of economic success, visionary entrepreneurs, growing competitiveness and unlimited potential, and yet we have a capital markets regulatory system that is out of step with the western world.
We are the only industrialized country that does not have a common securities regulator. Our system of 13 regulators is cumbersome, fragmented and it lacks the proper tools of enforcement. To maximize our potential, the government's goal is to work in collaboration with the provinces and territories to develop a competitive advantage in global capital markets. That includes reforming Canada's securities regulatory system.
This goal flows from our long term economic plan for Canada called Advantage Canada which was published in October 2006. In that plan, we committed to focus on creating five key advantages for Canada. First is a tax advantage, which means reducing taxes for all Canadians and establishing the lowest tax rate on new business investment in the G-7. We have taken significant action on that front, most recently in budget 2008 with the tax free savings account.
Second is the creation of a fiscal advantage. This means eliminating Canada's total government net debt in less than a generation. We are well on our way to meeting that commitment.
Third is the creation of an infrastructure advantage, which means building modern, world-class infrastructure that promotes economic growth, a clean environment and international competitiveness. We are investing $33 billion over the next seven years, as well as $500 million in public transit, to ensure that Canada has a modern, high quality infrastructure to take us into the future.
Fourth is creating a knowledge advantage. We need to have the best educated, most skilled and most flexible workforce in the world. The government has invested significantly in knowledge, science and innovation.
Finally, Advantage Canada commits to creating an entrepreneurial advantage. This means reducing unnecessary regulation, red tape and increasing competition in the Canadian marketplace.
Specifically, we committed to securing a competitive advantage in global capital markets. In budget 2007, we followed through on that commitment with the capital markets plan. To put the plan in context, in 2004 all provinces and territories, with the exception of Ontario, agreed to a process to create a passport-style system to regulate securities.
Those initiatives narrowed regulatory differences, harmonized and streamlined securities laws, initiatives that are important to achieving a more efficient and effective regulatory system in Canada. Through their actions, the provinces and territories have demonstrated a clear commitment to improving our securities regulatory system.
Those actions, although commendable, do not go far enough or fast enough. With the passport system, Canada still has 13 securities regulators, 13 sets of laws, however harmonized, and 13 sets of fees. Moreover, the passport system lacks national coordination of enforcement activities making it difficult to maximize results in this critical part of the securities system.
Furthermore, the passport system does not address our need to improve policy making. It is still necessary to obtain agreement from 13 regulators to make changes to rules. This is just too cumbersome. In short, the passport system is not where Canada needs to be in today's global economy.
Where do we go from here? The vast majority of capital market participants and observers agree that we could no longer afford to sit back and watch our competitors pass us by. We have great advantages to offer here in Canada: an educated labour force, social benefits and a strong economy. Now is the time for a more efficient capital market system. The benefits of a common securities regulator are well known.
Furthermore, unlike what the Bloc Québécois across the floor would have us believe, the creation of a single securities regulator would allow all regions of Canada to have a say.
In fact, such a solution would make the regulation of our markets more responsive and accountable by creating a decision making body that would coordinate the views of all jurisdictions promptly and fairly.
I say again, as I have said before, we are not talking about a federal securities regulator. We are talking about a common securities regulator for Canada.
Recent developments in global capital markets underscore the need for a mechanism that will provide Canada with the policy and regulatory capacity we need to react quickly and effectively to address new and emerging issues. Let us look at the advantages of a common securities regulator. There are numerous advantages for Canada.
First, a common securities regulator would improve market efficiency and ensure the best use of money and resources, and make the system more efficient to operate. This, in turn, would lower costs and make it more affordable for all who benefit from it, both those with capital to invest and those with businesses to build.
Another advantage is that a common securities regulator would improve enforcement and better protect investors with a common set of sanctions and remedies, as well as better enforcement across the country. Indeed, by serving as a single point of contact for law enforcement agencies, both at home and abroad, Canada would be better placed to share information and detect market fraud.
Moreover, we would be able to set clear enforcement priorities across the country while making sure investigation and enforcement resources are deployed efficiently. As I mentioned earlier, a common securities regulator would give all regions of Canada a real say.
In fact, the creation of a common regulator would better serve our common interest by establishing a structure that would allow all regions of the country to participate in market regulation in a more meaningful and constructive way.
Having such a structure would ensure meaningful participation by all provinces and territories, with a strong presence in all regions and local expertise that would respond to regional needs, for example, the oil and gas industry in the west or the futures market in Montreal.
Canada is a respected voice on the international stage. A common securities regulator would also allow Canada to speak with one voice. Speaking with one voice can only serve to enhance the protection and promotion of the interests of Canadian market investors and businesses. I have been pursuing the concept of free trade and securities with my counterparts in the United States, the G-7 and international partners that share high standards of investor protection.
Under a mutual recognition of each other's regimes, our investors would have better access to global opportunities and businesses listed on our exchanges would have better access to global investors. It is a win-win proposition.
The bottom line is simplicity and effectiveness. A common securities regulator represents an opportunity to move toward simpler, more principles-based regulation. Let us face it, Canada needs a regulatory framework that is world class and this is the way to do it.
We need a framework adapted to the make-up of our capital markets, with both Canada-based global corporations and a large number of small and medium-sized businesses. Too many complex rules get in the way of both efficient financing and effective investor protection.
Exerting further leadership and developing a single code for Canada with the right balance of rules and principles would help establish a clear competitive advantage for Canada in global markets. Clearly, this is an advantage to a common securities regulator.
Our securities regulators are engaged constructively, but our capacity to implement a strategy and secure an agreement for all of Canada would be greatly enhanced with one regulator clearly accountable to negotiate on Canada's behalf.
I have made the case to all ministers responsible in the provinces and territories that we must look beyond the passport system. To that end, as I mentioned at the outset, that is why we have established an expert panel to provide advice on how to best move forward on developing a model common securities act to create a Canadian advantage in global capital markets.
In closing, let me be clear. Establishing a common securities regulator, breaking down interprovincial trade barriers, and strengthening Canada's economic union are all priorities of our government.