House of Commons Hansard #64 of the 39th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was national.
Government Response to PetitionsRoutine Proceedings
Regina—Lumsden—Lake Centre Saskatchewan
Conservative
Tom Lukiwski ConservativeParliamentary Secretary to the Leader of the Government in the House of Commons and Minister for Democratic Reform
Mr. Speaker, pursuant to Standing Order 36(8)(b) I have the honour to table, in both official languages, the government's response to 26 petitions.
Judy Wasylycia-Leis NDP Winnipeg North, MB
moved for leave to introduce Bill C-524, An Act to amend the Immigration and Refugee Protection Act (exception to inadmissibility).
Mr. Speaker, it is my privilege to present the bill to the House and to recommend its serious consideration.
The intent of the bill is to right a wrong under the Immigration and Refugee Protection Act, which is the broad permission it gives to exclude people living with disabilities from immigrating to Canada. It adds candidates who qualify for provincial nominee programs to those family class immigrants and refugees who are exempt from being turned away due to the excessive demand provisions of section 38 of the immigration act.
It is an attempt to end the hypocrisy of signing a UN declaration around the rights of persons with disabilities while maintaining an immigration system that does anything but offer that respect by falling back on stereotypes and assumptions. It is a beginning, a specific way of eliminating discrimination and one that points to the need for a more comprehensive system and public discussion about how to end discriminatory practices in the system, practices that deny Canada immigrants with many abilities by focusing on a particular disability. This is one way of making Canada a more welcoming country.
(Motions deemed adopted, bill read the first time and printed)
Paul Szabo Liberal Mississauga South, ON
Mr. Speaker, I am delighted today to present yet another income trust broken promise petition from a large number of residents in Kingston, Ontario, who remember the Prime Minister boasting about his apparent commitment to accountability when he said that the greatest fraud is “a promise not kept”.
The petitioners remind the Prime Minister that he promised never to tax income trusts, but he broke that promise by imposing a 31.5% punitive tax, which permanently wiped out over $25 billion of the hard-earned retirement savings of over two million Canadians, particularly seniors.
The petitioners therefore call upon the Conservative minority government: first, to admit that the decision to tax income trusts was based on flawed methodology and incorrect assumptions; second, to apologize to those who were unfairly harmed by this broken promise, and I see that members opposite are very agitated, but it is the truth; and finally, to repeal the punitive 31.5% tax on income trusts.
Alex Atamanenko NDP British Columbia Southern Interior, BC
Mr. Speaker, it gives me great pleasure to present a petition with over 6,000 names of residents in the South Okanagan and Similkameen and other communities in British Columbia who want to create a national park reserve. They feel that there are more species at risk in the south Okanagan and Similkameen valleys than in any other part of British Columbia. This area also contains the antelope brush ecosystem, also known as Canada's “pocket desert”, which is one of the most endangered habitats in the country.
The petitioners call upon our government to uphold the standard of protection afforded by the National Parks Act and to protect at least 100,000 hectares of land in total, including significant tracts of currently unprotected crown lands and the grasslands and forests of the region. This includes a $50 million park acquisition fund to purchase private lands for protection, to buy out grazing leases on crown lands, and to provide conservation financing for local first nations. It also encompasses the existing provincial parks and protected areas in the region, including in the highly ecologically important Vaseux and White Lake protected areas.
Ed Komarnicki Conservative Souris—Moose Mountain, SK
Mr. Speaker, I have a petition to present to the House today in which the petitioners are requesting that the Minister of Foreign Affairs establish a full service passport office in the riding of Simcoe—Grey to meet the growing needs in Simcoe--Grey, York—Simcoe, Bruce—Grey—Owen Sound, Simcoe North, Parry Sound—Muskoka, Dufferin—Caledon, and Barrie.
Ed Komarnicki Conservative Souris—Moose Mountain, SK
Mr. Speaker, I have another petition to present to the House today. The petitioners indicate that a new terminal at the Collingwood airport should include an office designated to process transborder and international clients and note that clients are currently rerouted to Kitchener for clearance before continuing on to Collingwood.
The petitioners call upon the Minister of Public Safety to review and award port of entry status to the Collingwood airport.
Questions on the Order PaperRoutine Proceedings
Regina—Lumsden—Lake Centre Saskatchewan
Conservative
Tom Lukiwski ConservativeParliamentary Secretary to the Leader of the Government in the House of Commons and Minister for Democratic Reform
Mr. Speaker, I ask that all questions be allowed to stand.
Lee Richardson Conservative Calgary Centre, AB
Mr. Speaker, I wonder if you might ask for consent to revert to presenting reports from committees.
The Speaker Liberal Peter Milliken
Is there unanimous consent to revert to presenting reports from committees?
Lee Richardson Conservative Calgary Centre, AB
Mr. Speaker, I am pleased to present, in both official languages, the third report of the Standing Committee on International Trade, entitled “A Study of the Canada-Korea Free Trade Negotiations”. The committee requests a government response.
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
moved:
That, in the opinion of the House, the government should immediately abandon the idea of creating a common securities regulator, since securities regulations fall under the legislative jurisdiction of Quebec and the provinces and because this initiative is unanimously condemned in Quebec.
Mr. Speaker, it is rather distressing that the Bloc Québécois has to put forward this morning the kind of motion you just read.
The fact of the matter is that the Conservative government, and the current Minister of Finance in particular, seem to be obsessed with taking away from Quebec important rights with respect to financial administration and centralizing everything for all of Canada in Toronto. However, the securities commission, and anything relating to it, is a constitutional responsibility of the Government of Quebec.
We rise in this House because the Bloc Québécois is the torch-bearer of the consensus on this issue in Quebec and, in the budget brought down on February 26, the Minister of Finance clearly indicated that he will be continuing with his steamroller approach to establishing a Canada-wide securities regulator, even though that is unanimously condemned in Quebec.
That is why the Bloc Québécois is bringing this matter to the attention of the House today. A clear message must be sent to the government that it would be unacceptable.
Why pay special attention to that issue? Because the whole area of securities represents an important sector of economic activity. For one thing, securities are fungible, negotiable and transferable instruments that can be listed on the stock exchange. The two main classes of securities are stocks and bonds, but there are others, such as certificates of investment and warrants.
Securities trading is currently regulated by Quebec and the provinces. In Quebec, the Autorité des marchés financiers is the agency responsible for regulating securities. For example, a company looking to issue a first series of shares on the Quebec stock market has to abide by the rules set out by the Autorité des marchés financiers. We share a passport system for securities regulation with the securities commissions of the other provinces, except Ontario. That province has taken the approach of the current Minister of Finance. This shows that his attitude is really to move toward giving to Ontario a responsibility that is currently that of the provinces and which, in Quebec, has always been carried out seriously.
It is important that the public know that the Bloc's position is also the unanimous position of the National Assembly of Quebec. It is not a position taken solely by the representatives of sovereigntists. On this issue, we represent the entire National Assembly of Quebec in this House.
I will read the motion adopted unanimously by the National Assembly on October 16, 2007.
THAT the National Assembly ask the federal government to abandon its Canada-wide securities commission project.
The wording could not be clearer. The motion indicates that the three parties in the National Assembly of Quebec want the federal government to stop the offensive that the Liberals began and the Conservatives have continued, because what the government is doing is not what we want.
Even after this motion was adopted in October 2007, the Minister of Finance decided on February 26 to go ahead. He heard from Quebec's finance minister, who, on this issue, shares our views and speaks for the Government of Quebec.
I want to read the letter that Monique Jérôme-Forget, Quebec's finance minister, sent Mr. Flaherty on February 28, two days after he brought down the budget.
Dear colleague,
I have noted the appointment of your expert panel charged with making suggestions and recommendations concerning securities regulation in Canada.
And here, every word is important. The minister goes on:
First of all, I reiterate that the existing regulatory system in Canada works well and satisfies both the needs of pan-Canadian participants and the interests of the various regions. Accordingly, I will continue to oppose the implementation of any model leading to the concentration of market oversight responsibilities in the hands of a common or single regulator, regardless of how you call it.
Quebec's finance minister is clearly saying that she does not want anything to do with the model that the federal Minister of Finance wants to put in place and that he talked about in his budget. She goes on:
The passport system that the participating provinces and territories are setting up is a significant and unprecedented initiative to further simplify matters for pan-Canadian participants. It is a cooperative approach by the provinces and territories that enables them to continue to monitor their local interests. The systematic refusal to acknowledge the advantages of such a system leads me to wonder whether all this effort is truly aimed at improving protection for the investing public.
Quebec's finance minister is wondering whether the current federal Minister of Finance effort is truly aimed at improving protection for the investing public and we might ask ourselves the same question. Indeed, as far as the issue of securities is concerned, the model developed in Quebec and Canada has been recognized by the International Monetary Fund as an excellent model for providing satisfactory services using a decentralized approach.
In the past, on a number of occasions, some original initiatives have been taken in Quebec and other provinces. Just look at the stock savings plan implemented by Jacques Parizeau. This was followed by action focusing on how to ensure compliance with the law. Recently there was the Norbourg case where a person was sentenced to 12 years, which is something we have never seen the federal government do. And, the RCMP did not get involved in this case even though it could have.
The current model in Canada has the flexibility that we wanted to see in the Constitution. Quebec, for whom we represent the consensus here, would like that model to be upheld.
I will continue to read the letter from Quebec's finance minister.
I must say that the federal government could apply its energies much more productively if, in its fields of jurisdiction, it worked to more effectively crack down on economic crime rather than trying to impose itself in a field of exclusive provincial jurisdiction.
This is nothing new. The federal government, which has never been able to stick to its own jurisdictions, is always tempted to meddle in other areas of jurisdiction. Securities are the Minister of Finance's current obsession.
I am going back to the minister's letter.
Given the mixed, to the say the least, results it has achieved in combating economic crime, in spite of the money spent, it seems to me that the federal government is not doing enough to assume its responsibilities, in particular regarding criminal law.
I think the Quebec finance minister's opinion is quite accurate—harsh, but accurate—and that indeed the federal government would do much better to take care of its own responsibilities than to try to meddle in those of others.
I will finish reading the letter from Quebec's finance minister.
As for the expert panel—which the minister appointed—I note that you have ignored the proposals made to you by the Provincial-Territorial Council of Ministers of Securities Regulation. In so doing, I believe you have missed a good opportunity to obtain information that would have helped you better understand the point of view of the provinces and territories. Unfortunately, I fail to see that yet another panel, whose conclusions seem predictable to us, can bring anything new to this debate.
Believe me when I say that I am sorry to see you invest your effort and good will, which I in no way doubt, in such an ill-advised initiative when your energies could be applied much more productively.
A copy of this letter was sent to all the ministers responsible for securities and to the members of the panel.
Quebec's finance minister is clearly disapproving, taking the same line as the unanimous motion by Quebec's National Assembly. The minister has also harshly criticized the Minister of Finance's manipulative use of the panel. We should remember that initially, this panel was created to evaluate the existing system and the other possibilities. But the Minister of Finance decided to use it as a tool to help put forward his proposal. The budget clearly mentions a “common securities act” that the minister wants to develop by the end of 2008 for all of Canada. The Bloc Québécois is against this, as is all of Quebec. Quebec cannot allow such an important tool out of its control.
Let us remember that there is an international securities association, and that within that association Quebec speaks for Quebec. We will recall the entire process we went through over the idea of the Quebec nation, the motion that was adopted here. So what we have here is a double standard. A motion about the nation is adopted, and on the other hand the federal government’s action would aim to deprive Quebec of one of the rare areas where it can speak directly to the international community, through the international securities association. Essentially, this amounts to the federal government looking for information so it can go and speak on the international scene about a matter it does not control. Quebec is at the controls in this area, and wants to stay there. That is what our motion is intended to do today.
We are innovators in this area. We have developed a passport system with the securities commissions in the other provinces. The passport system facilitates interprovincial transactions. This means that a business in Quebec that intends to issue shares or do something involving securities will be able to use that system to do it based on its recognition in Quebec and to do it in the other provinces.
This is a screening system comparable to what in fact exists through contacts between education ministers in the various provinces. This is where Quebec wants investments to be made. The system has to be as permeable as possible to enable companies to do business in all of the provinces, in a way that is completely consistent with the jurisdiction exercised by Quebec and the provinces in this area. As well, the federal government would have to abandon its attempt to bulldoze the province’s responsibilities into its own yard.
In Quebec, the Autorité des marchés financiers is the body that enforces the rules of the game in terms of regulating the processes by which a business issues shares and bonds. The Autorité des marchés financiers can apply sanctions to businesses or individuals who fail to comply with the Securities Act. The Autorité des marchés financiers can initiate prosecutions in the Court of Québec leading to fines and imprisonment for individuals who are convicted. However, those prosecutions are not under the Criminal Code, as in the case of Vincent Lacroix. Although he was convicted under the Act respecting the Autorité des marchés financiers, which is legislation under Quebec’s jurisdiction, other charges might be laid under the Criminal Code by the RCMP, which is under federal jurisdiction.
The passport model developed in Quebec and the other provinces corresponds exactly to the model that currently exists in Europe, between sovereign countries that apply the same system. Please do not tell us that the current model in Quebec is outmoded. The European Economic Community is a very modern body that is expanding and that decided to go ahead and do this. We would hope that the federal government will exhibit the same openness so that the system can be modernized to allow for greater transfer permeability, while not interfering in matters under Quebec’s jurisdiction.
The mission of the Autorité des marchés financiers is to enforce the legislation regulating the financial sector, including insurance, securities, deposit institutions—except banks, which are under federal jurisdiction—and the distribution of financial products and services. More specifically, the Autorité des marchés financiers must provide assistance to consumers of financial products and services and ensure that the financial institutions and other regulated entities of the financial sector comply with the solvency standards applicable to them as well as the obligations imposed on them by law.
There are all kinds of issues, in this regard, subject to the Civil Code. We have two different systems in Canada: the Civil Code in Quebec and common law in the rest of the country. We have different ways of doing things when it comes to how securities are handled, and that is one of the reasons why we want Quebec to retain full responsibility for this sector.
The Autorité des marchés financiers also supervises the activities connected with the distribution of financial products and services; supervises stock market and clearing house activities and monitors the securities market; sees to the implementation of protection and compensation programs for consumers of financial products and services; and administers the compensation funds set up by law.
The different system we have developed in Quebec reflects our social values, which have rubbed off to some extent on how securities are handled. If there were just one Canada-wide system, all the particularities of the Quebec system would immediately be lost, and that is another reason why we want to continue with our own system.
Take, for example, the federal restrictions on insurance retailing by banks. In Quebec, we decided a long time ago to allow the Desjardins Group to operate in this market to facilitate its interaction with consumers and provide them with more choice. The initiative shown by a man like Jacques Parizeau, who often proved very innovative in the use of financial tools to help Quebec develop, was instrumental in the emergence of a system unique to Quebec. We could not have developed these tools under a federal, Canada-wide securities regulator, and most importantly, we would no longer be able to in the future.
Under all its responsibilities for securities, the Autorité des marchés financiers oversees the proper operations of securities markets and ensures the protection of investors. To do this, it analyzes disclosure documents regarding securities distributions or public offerings. The entire language issue also arises in this regard. Under a Canada-wide system, things would be done quite differently.
The Autorité des marchés financiers makes sure that reporting issuers, i.e. all organizations that have issued public offerings, provide securities holders, the shareholders, and the other market participants with the financial statements, MD&As and other documents required by law and regulations.
It ensures that securities issuers and other financial sector participants adhere to their obligations, for example, by filing insider reports within the specified time periods. It also oversees the establishment and implementation of orientations and regulations pertaining to capital markets.
It is very clear, therefore, that this an entire sector of the economy that is very important and growing ever more so because of all the things being taken over by the private sector. There are also all the international activities with the globalization of capital.
The fact that each province has its own regulators means we can have different, more flexible approaches. We want this social value maintained. We do not want it all changed, either for the Canadian economy as a whole or for Quebec, which has developed its own approaches and wants to continue implementing them.
Unfortunately, the 2008 budget confirmed the Conservative government’s intention to establish a single commission. To do that, the minister mandated an expert panel to prepare a bill that would create a single securities commission. That means the House will be asked to deal with a bill that flies in the face of the constitutional responsibilities of Quebec and the provinces on this matter. I do not know how the bill will be drafted. Will they be forced to use a notwithstanding clause? Do they want to open the whole constitutional question? Will they try to slyly get around it using regulatory amendments or special approaches? Is the Minister of Finance trying to come up with a negotiating tool that will encourage Quebec to give in? Quebec will not give in on this issue because it is unanimous and wants to retain its authority in financial markets. That is one of the strengths of our economic action and we want to be able to retain it. Let us remember that the expert panel's report will be presented in late 2008.
In our opinion, this is an unacceptable situation. The minister stubbornly persists with a bill that goes against the unanimous vote of the National Assembly, which is a flagrant violation of Quebec’s constitutional jurisdiction. We will continue to defend Quebec against the centralizing tendencies of the federal government.
It was a waste of time changing the government. We are always faced with the same situation. Those who were elected—or at least those elected members who talk about decentralization during election campaigns and, more specifically, the current Prime Minister—wanted to give Quebec its rightful place. The day after the election, we were already starting to feel this. As time goes by, the government, whether Liberal, Conservative or other, has been calling for a centralizing approach that is not appropriate and, in addition, does not correspond to fields of jurisdiction. The Bloc Québécois is now the best tool for defending Quebec on the floor of the House of Commons.
This seems to us once again a very flagrant example of the fact that the only solution is for Quebec to become sovereign. Once Quebec is a country, it will have authority in terms of financial markets. We will no longer be forced to deal with attacks such as the one the Minister of Finance is now leading in an effort to change, indirectly, an existing provincial jurisdiction.
Since 2003, the matter has again moved to the forefront of federal politics. The Liberals established an expert panel when they were in power. In 2005, the Ontario government mandated a group of experts, led by Purdy Crawford, to examine the advantages of a single securities regulatory system. Clearly, that report was written to be able to say that it would be better to have a single regulator. The idea surfaced in the 2006 federal budget, where the government announced that it was committed to working with the provinces and territories in order to establish a common securities regulator.
In my opinion, we can clearly see the federal government's steamroller tactics, regardless of the party in power.
At the same time, we see the unanimous position of Quebeckers. This unanimous position was demonstrated in a Quebec National Assembly motion and is defended by the current Quebec finance minister, a federalist minister who finds the Conservative government's approach unacceptable.
The unanimous position of Quebeckers is defended in this House by the Bloc Québécois, which is calling on the House of Commons here today to force the Conservative government to stop its steamroller tactics. Despite past government initiatives, we would like to be supported on this. One thing that is certain is that all Quebeckers are behind us. We will not give up until the Conservatives decide to abandon this plan that in no way serves Quebec's economic future.
Brian Fitzpatrick Conservative Prince Albert, SK
Mr. Speaker, it seems to me that virtually every Quebec public company that I am aware of trades on the Toronto Stock Exchange and they do it to gain access to national and international capital markets.
If I were to talk to the CEOs of these companies, whether it is BCE, Bombardier or any other company, I am quite sure they would be the first people to say that we have too many regulators in the business. It drives up the cost of public financing and it makes the cost of capital uncompetitive in Canada. I think they would be the first people to step up to the plate and ask to be freed from this over-regulation that we have across the country.
Oil companies in Alberta would probably be in the same boat. They are listed on the Toronto Stock Exchange and they must comply with the Ontario Securities Commission's rules and maybe 13 provincial and territorial agencies on this. It drives up the cost of raising capital and gaining access to the markets.
The reality is that Quebec companies are trading on the Toronto Stock Exchange today. Does the Bloc Québécois not understand that reality?
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Mr. Speaker, that is not the view of just the Bloc Québécois; the current Government of Quebec—the Quebec federalist government—and the three parties represented in the National Assembly of Quebec concur with the Bloc Québécois.
In its most recent economic survey, the OECD ranked Canada second for the quality of its securities regulation. That means that the current system in which companies operate is fine. In addition, in a study of global financial systems, the World Bank ranked Canada as a leader in securities trading. At present, all Canadian securities commissions in Canada are represented at the International Organization of Securities Commissions. This system works very well, is recognized within Canada, in Quebec and internationally.
That is why we want the Conservative government to abandon its current tactic, which is not at all a decentralizing approach. There must be respect for jurisdictions. It is unacceptable to say to Quebeckers, on the one hand, that they form a nation and, on the other, to attempt to take away from them an important tool for economic intervention. It is unconscionable and for that reason Quebec stands united. The Bloc Québécois and the Parti Québécois are against it and so are the Liberal Party of Quebec—the governing party— and the Action démocratique du Québec. All of Quebec stands behind the position being defended today by the Bloc Québécois.
Paul Szabo Liberal Mississauga South, ON
Mr. Speaker, the objective of securities regulators is to ensure capital markets are efficient, fair and transparent, and I think the member will agree with that.
He may also want to comment on whether the consolidation of securities regulation in Canada might be enhanced to deal with discrepancies between the jurisdictions of the provinces in terms of public disclosure, information sharing between companies and investors, the fact that it might create distorted markets if there is not that standardization and maybe even an increased risk for investors. These seem to be desirable objectives in terms of security for all investors throughout Canada. I wonder if the member would care to comment?
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Mr. Speaker, I thank my colleague for his question. I will refer him to a letter dated February 28 from Ms. Jérôme-Forget addressed to the Minister of Finance of Canada, saying the following:
First of all, I reiterate that the existing regulatory system in Canada works well and satisfies both the needs of pan-Canadian participants and the interests of the various regions. Accordingly, I will continue to oppose the implementation of any model leading to the concentration of market oversight responsibilities in the hands of a common or single regulator, regardless of how you call it.
And she added:
The passport system that the participating provinces and territories are setting up is a significant and unprecedented initiative to further simplify matters for pan-Canadian participants. It is a cooperative approach by the provinces and territories—
In other words, we have two choices today: go for the centralizing approach of the Conservatives who will change all the rules or move toward the cooperative approach sought by Quebec's financer minister. As far as we are concerned, the choice is cut and dry for Quebec; it is the one made by the Government of Quebec, the National Assembly of Quebec, and which the Bloc Québécois stands for in this House.
Jeff Watson Conservative Essex, ON
Mr. Speaker, I am wondering why the Bloc fears a common securities regulator would give more power to Ontario. First, it will not be an Ontario focused regulator and, second, if I understand the current situation, Ontario is the de facto regulator of securities in Canada, with the OSC currently regulating over 80% of securities.
Would a common securities regulator not in fact actually give more influence to other provinces and less to Ontario?
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Mr. Speaker, I do not know how many times we will have to repeat this, but we will repeat it as long as people keep asking us questions. Our position this morning is not the Bloc Québécois'; it is Quebec's position, the position of the Government of Quebec, which knows that this is an important tool for the future. In the context of globalization, there is a system that works and that gives powers to Quebec. This system is set out in the existing Constitution. Quebec does not want to turn that power over to a pan-Canadian authority because Quebec has ways of doing things and models that would not have been developed by a pan-Canadian commission.
How paradoxical that the only province that does not want to go ahead with the passport system is Ontario. What is motivating the province? All of the other provinces think that this is the best system, and they want to go forward with it. That is why we find it unacceptable for the Minister of Finance to steamroller ahead with a bill for a common securities regulator. The federal Parliament should not even be allowed to consider such a bill because jurisdiction in this matter is clearly defined: Quebec and the provinces are responsible for securities regulation, and the system is working. We are not talking about a dysfunctional model. Our model is recognized by the International Monetary Fund. The OECD has recognized our model as the second most efficient one in the world.
Yet we have to find other reasons. I think this is an obsession shared by Ontario, Toronto, and the current Minister of Finance. I do not know if there are career goals hidden behind all of this, but it is clear that this is not a choice that will be good for Quebec's future. All of Quebec has said so, Quebec's National Assembly and the Government of Quebec agree on this, and the Bloc Québécois is bringing their position to this House.
Opposition Motion--Securities RegulationBusiness of SupplyGovernment Orders
Whitby—Oshawa Ontario
Conservative
Jim Flaherty ConservativeMinister of Finance
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.
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Mr. Speaker, I thank the Minister of Finance for taking part in this opposition day debate. However, I want to remind him about the letter that Quebec's finance minister, Ms. Jérôme-Forget, wrote to him on February 28, 2008, after the budget was introduced. I will read some excerpts, and I would like to get his reaction. Ms. Jérôme-Forget said:
Accordingly, I will continue to oppose the implementation of any model leading to the concentration of market oversight responsibilities in the hands of a common or single regulator, regardless of how you call it.
As regards the panel, she also said:
As for the expert panel, I note that you have ignored the proposals made to you by the Provincial-Territorial Council of Ministers of Securities Regulation. In so doing, I believe you have missed a good opportunity to obtain information that would have helped you better understand the point of view of the provinces and territories. Unfortunately, I fail to see that yet another panel, whose conclusions seem predictable to us, can bring anything new to this debate.
Believe me when I say that I am sorry to see you invest your effort and good will, which I in no way doubt, in such an ill-advised initiative when your energies could be applied much more productively.
My question is for the Minister of Finance.
While the OECD says that we rank second among the world's best systems—not because of the government's centralizing changes—and while the World Bank is saying that we are a leader, I see only one answer in the minister's comments, and it is a terrible answer for Quebec, because he said that Canada must “speak with one voice”.
We want to keep what Quebec has obtained in this area, namely to be able to speak directly to the International Organization of Securities Commissions. That is not the position of Quebec's sovereignists, but of all Quebeckers. It is based on a motion that was carried unanimously at the Quebec National Assembly, and it is reflected in a letter addressed by Quebec's finance minister to the federal Minister of Finances, following the introduction of the last budget.
How could the Minister of Finance continue to want to move forward with a project that is not in the best interests of Quebec, or of the provinces, and that is being condemned by Quebec and the provinces? This government has recognized the Quebec nation and its right to be present on the international scene, but it tries to deny Quebec at the first opportunity. Is this acceptable? I can assure the minister that he will find the Bloc Québécois, and all of Quebec, in his path if he decides to keep moving forward with this thinking.
Jim Flaherty Conservative Whitby—Oshawa, ON
Mr. Speaker, may I ask the hon. member how it serves the people of the province of Quebec when 80% to 85% of the power of the regulation of securities in Canada is through the Ontario Securities Commission which is a creature of the legislative assembly of the province of Ontario?
How does that serve the people of Quebec, to have the legislative assembly of the province of Ontario determining the rules and regulations of securities regulations in Canada? If this is something desirable for the people of Quebec, that is news to me. But that is in effect what the hon. member is arguing.
It is also in effect what the minister of finance, my colleague in Quebec, is arguing as well, that Quebec does not want to be subservient to the legislative assembly of the province of Ontario because, de facto, that is the reality in Canada today.
I fail to understand how at the same time the hon. member and his party can advocate for a common carbon exchange, a national carbon exchange in Quebec, and at the same time they argue against a national securities regulator in Canada. This is inconsistent to say the least.
At one time they say, on the carbon exchange, “Oh, we want to govern all of Canada in Montreal”, and at the same time they say, “Oh no, but we don't want any part of a common securities regulator for our country”. This is incomprehensible.
Marlene Jennings Liberal Notre-Dame-de-Grâce—Lachine, QC
Mr. Speaker, I find the Minister of Finance's speech interesting. I am not surprised that the government is in favour of a national common securities board.
I do find it interesting, however, that the minister does not underline the fact that the only province that seems to be in favour of it is the province that he has been bashing for the last several weeks and months: the province of Ontario. He has bashed that province to the point where he is actually telling the world, “Don't invest in Ontario”.
This is a minister who, when he was in the provincial government, achieved one of the largest deficits provincially, after having run on a fiscally sound policy. He is now bringing the federal government and Canada to the brink of a deficit again, at a time when our economy is slowing down.
I find it interesting that this is the same minister who is dissing my Liberal colleague for his private member's bill on the RESP, claiming that it is going to bring Canada to the brink of a deficit.
A good fiscal finance minister would have, as elementary as A, B, C, taken the list of all private members' bills and costed out what it would cost if in fact the bills became law, and would have had budgeted for it in a contingency plan. But this minister, who wants to bring about this common securities regulator, and it is quite interesting, does not have the A, B, C elementary intelligence to establish a contingency fund on the basis that some of the private members' bills, or all of them, may come to fruition. Anyone who manages a household budget takes into account every eventuality that may come to fruition.
So, I would like to--
