Mr. Speaker, the Liberal Party of Canada recognizes that the creation of a national regulator, with the collaboration of all provinces, regions and territories, would be greatly beneficial for the economy of all regions of the country. The Liberal Party also recognizes that the contribution of provincial regulators is flexible and specific to the needs of their regional markets. In addition, the Liberal Party is not opposed to a national process and is therefore opposed to this motion.
Finally, the Liberal Party still wants to study, together with the provinces, a national securities regulation system which will improve coordination and regulation, while responding to the particular needs of all regions.
While the Liberal Party of Canada believes that securities regulation remains in the jurisdiction of the provinces, we also recognize that the creation of a national regulator through the cooperation of all provinces and territories would be of tremendous value to the economy in all regions of the country.
As the Minister of Finance has just cited, my colleague, the member for Wascana when he was finance minister was certainly in favour of a national, not necessarily a federal, regulator. He believes, as I believe, that while the passport system perhaps represents progress vis-à-vis the status quo, it is not sufficient to accomplish the full objectives which we have for national securities regulation.
This debate is among the oldest debates in this House. In fact, it goes back to the early 1900s when provinces noticed that the federal government was taking little or no action with regard to securities regulation. I think we could almost say it is a non-partisan issue going back as it did to 1905. As a result of this void the provinces began drafting their own securities regulations, and this is how Canada developed its current patchwork of regulations which we have in this country today.
Many of the countries which were engaged in the development of securities regulation around that time opted for a different route. The United States, for instance, saw several states creating their own separate securities laws as inefficient and chose to create the federal U.S. Securities and Exchange Commission in 1934.
The goal of each provincial regulator is essentially the same: regulate securities trades; ensure that appropriate levels of information about publicly traded companies is available to investors; conduct prospectus reviews; and protect investors through enforcement activities.
While this was a reasonably effective way to regulate the securities industry in Canada throughout much of the 20th century, times are changing. In the 20th century, global capital has become so fluid that investment decisions can easily be made based on the fact that securities regulation in one country is too onerous vis-à-vis another country.
The majority of provinces, however, have indicated quite clearly that they are not in favour of a national system. The Quebec National Assembly has indicated it is not interested. When the Alberta finance minister mused that it was time for one, he was sternly rebuked by his premier, who reiterated that his province was not interested.
Ontario is the only province that has consistently been in favour of a single regulator. This, however, has put Ontario at odds with the provinces which are now working toward building a kind of passport system through the Canadian Securities Administrators, or CSA.
The CSA is a forum where the country's 13 individual securities regulators meet to ensure that their regulatory efforts are somewhat coordinated. It is through this body that the majority of Canada's provinces are currently working to implement the passport system.
In just seven days the CSA will officially launch the next phase of that plan. As of next Monday, when a review of a prospectus is approved in one province, it will now automatically be cleared in the provinces and territories that have signed on to the passport model.
The CSA has also announced that the next phase in implementing the passport system will be the creation of a passport that recognizes the registration of securities. Some organizations have lent some tepid support to the passport system, indicating that while not great for Canada, it would be better than the current system. Others, like the Canadian Bankers Association, have indicated that while the sentiment is there, the passport system could actually turn out to be even worse for Canada.
Meanwhile at the federal level, we have had nothing but bungling from Canada's finance minister. The good news is that if markets value consistency, and I guarantee that they do, they can always count on Canada's finance minister to bungle some important file.
The list is so long I would run out of time to try to encapsulate all of these areas, but I would start with income trusts, which is the obvious case of a broken promise that caused some $25 billion to go up in smoke in a single day and which in fact has caused additional tax leakage rather than resolved the problem of tax leakage.
I would also mention interest deductibility, from which thankfully the minister backed down under pressure from Liberals and the business community, but would have been an absolute disaster for the competitiveness of Canadian companies operating abroad.
I could mention as well the GST. The government invested $12 billion a year in a GST tax cut, thereby forgoing huge opportunity for meaningful cuts in income tax or meaningful support for post-secondary education, as was reflected in the private member's bill from the Liberal side the other day. The minister's overall record of economic management is a sad story.
I should mention a few words about that also in the context of the private member's bill. As my colleague from Lachine, I believe, pointed out, when we were in government and the member for Wascana was the finance minister, and before him when the member for LaSalle—Émard was the finance minister, we always had at least a $3 billion contingency reserve that would respond to unforeseen shocks, whether these shocks came from SARS, 9/11, a U.S. recession, an Asian crisis, or an ice storm. The world is an unpredictable place, but parts of the world are predictable, and one of the predictable parts of the world is private members' bills that are in the pipeline.
The private member's bill was in the pipeline two years ago. It was actually introduced two days after the Minister of Finance raised income tax in his budget. It seeks to provide meaningful support to Canadian parents and grandparents and students who wish to undertake the very expensive but very necessary activity of post-secondary education. This, unlike the minister's pathetic savings plan in comparison, would have provided meaningful support for this activity.
Had the minister behaved in a fiscally prudent and responsible manner, he would have been aware that this was coming down the pipeline. Rather than spend in a drunken fashion in his first three years in office when the economy was prosperous, he would have forgone a little bit of that spending during good times so as to have an adequate reserve at this time, when times are difficult, in order to absorb items like the private member's bill on RESPs.
What has he done? He has instead taken us so close to the edge where the projected surplus next year is $2.3 billion, and the year after it is $1.3 billion, far lower than any responsible government would take the country, thereby leaving us open to a return to deficits, whatever the nature of the shock may be, whether it is a private member's bill or some other item to hit the economy.
As I have said, the Liberal Party will oppose this motion. We are in favour, not of a federal single regulator, but of a system of national regulation, as has been reflected in the views of our governments in past years.