Mr. Speaker, I am happy to share my time with the Minister of Finance.
Today's motion is a pretty transparent and desperate attempt by an increasingly irrelevant federal Liberal Party of Canada to involve itself in what has been, pushing aside all the expected partisan sniping, a largely substantive policy argument surrounding the question of how Canada and our provinces should react to global market volatility in order to stimulate and maintain economic growth.
Clearly there are two differing viewpoints on this substantive matter, and both are being publicly discussed and debated.
When we consider some of the more trivial matters occupying public discourse, to some degree a debate like this is quite refreshing. We should, and I will today, take this opportunity to build some substantive policy issues directly related to improving Canada's, indeed, Ontario's, economic prosperity, sales tax harmonization and the modernization of Canada's security regulatory framework.
Moreover, both of those issues are instances where cooperation between the federal and provincial government is essential to move them forward.
First, I will begin by examining the need for an improved security regulation in Canada and our government's efforts to facilitate this change. We have a strong financial services sector in Canada, a sector that has a presence throughout the country and it has increasingly become a source of new, high quality, high paying jobs for Canadians.
This is especially true and important for Ontario where, as a recent Statistics Canada survey has pointed out, these new jobs are offsetting job losses in other sectors like manufacturing. For instance, Toronto's financial service sector has seen strong annual employment growth of approximately 2.5% in recent years, a trend most would like to see continue.
In Burlington, for example, my home riding, financial services is one of the four key sectors. We have a number of organizations from banks to mutual fund companies with head offices and back offices in Burlington providing all types of financial services to Canadians. That sector, in Burlington alone, employs 4,000 Burlingtonians.
We have a capital markets regulatory system that can be improved. Canada is the only industrialized country without a common securities regulator. It relies on what most impartial observers would describe as a cumbersome and fragmented system of separate provincial and territorial regulators who lack the proper tools of enforcement.
Indeed, there are 13 securities regulators with 13 sets of laws, however harmonized under a passport system, with 13 sets of fees, a system that also lacks critical national coordination of enforcement activities.
The overwhelming majority of market participants, business and labour organizations, economists and academics, international bodies, and even a former Liberal finance minister have been clear and consistent. We must improve Canada's securities regulation framework. The following are their comments.
The Canadian Union of Public Employees says:
...Canadians have been embarrassed and frankly appalled that regulation and enforcement of securities crime in Canada is so weak....
The IMF says:
Canada is currently the only G-7 country without a common securities regulator, and Canada's investors deserve better.
The Financial Post, on August 2007, had a survey which said:
It's loud and clear that [business leaders] want [a single] securities regulator....
The Investment Industry Association of Canada said:
Virtually everyone now recognizes that the existing multiple-regulatory system is badly flawed and in need of repair.
A Montreal Gazette editorial reads:
...a single Canadian securities regulator...would be more efficient in preventing or prosecuting frauds...than today's 13 provincial and territorial financial watchdogs.
The Liberal member for Wascana, who briefly served as the federal finance minister, said:
...we need to substantially improve our [fractured regulatory] system in Canada.
...the issue is real. The issue is urgent.
The Bankers Association said:
The cost and regulatory burden of a business having to file in up to 13 jurisdictions is a disincentive for foreign investors.
Finally, a Toronto Star editorial states:
Canada needs a single...securities regulator...Corporate Canada knows it. Investors know it.
To address these concerns, our federal minister has strongly advocated the need for a common securities regulator, the benefits of which are widely recognized and acknowledged.
First, a common regulator would strengthen both regulatory and criminal enforcement by forcing accountability, improving allocation of resources and ensuring consistent sanctions and enforcement are priorities.
Second, it would cut the red tape and reduce costs for investors participating in the markets.
Third, by ensuring efficient markets it would promote investment and stimulate productivity, growth and jobs.
Fourth, it would give all provinces more influence than now exists, where Ontario is the de facto regulator of securities in Canada, regulating over 80% of all activity.
One might assume that Ontario's government would be in opposition to the common securities regulator. Nothing could be further from the truth. Ontario's Liberal government and the federal government have been strongly allied on this issue, even establishing the influential Crawford panel in 2005 that proposed a move to a common securities regulator nationally.
We are thankful that Ontario has been a strong advocate of this change. We are very appreciative of the strong support of members of the Liberal provincial government, such as Gerry Phillips, an Ontario provincial remember who has worked to convince other provinces of the benefits of a common securities regulator and who publicly expressed his support and said:
We believe it is the right thing for Canada to have a common body of securities law, a single fee structure and a common securities regulator.
In this instance, our two governments are both actively complementing each other in pursuit of a common objective. We hope that other provincial and territorial governments will join us.
To that end, we have recently established an expert panel to provide advice on how to best move forward on developing a model common securities act. The expert panel, chaired by former federal minister of state for finance and the former president of the Investment Funds Institute of Canada, the hon. Tom Hockin, will offer independent advice and recommendations to the ministers, both federally, provincially and in the territories on the most efficient and effective way to go forward.
Improved securities regulation will not only create an advantage in global capital markets, but a prosperous economy benefiting all provinces and territories.
I will briefly examine the merits of sales tax harmonization. As this House may recall, our government, as outlined in Advantage Canada, budget 2007, the fall 2007 economic statement and budget 2008, has detailed the benefits of harmonization. It has been well established that provincial retail sales taxes deter business investment and, as such, are an impediment to Canada's productivity and competitiveness. This is especially relevant in Ontario's struggling manufacturing sector.
As Perrin Beatty, president and chief executive of the Canadian Chamber of Commerce, recently indicated:
The impact if...Ontario were to harmonize with the GST would be hundreds of millions of dollars of tax competitiveness in the province at a time when the manufacturing sector in particular is so badly squeezed. This would have been a major shot in the arm for the Canadian economy.
Ian Howcroft, of the Canadian Manufacturers and Exporters of Ontario, has also noted that a harmonized tax would help manufacturers immensely by harmonizing the provincial tax on business inputs, saving production costs and hours of paperwork stemming from filing taxes twice. He said:
It would alleviate a lot of the administrative challenges and the duplication of costs. It would be a great reliever of administrative and ultimately financial burdens for manufacturers.
This is little wonder as, I am sure the House will recall, the federal finance minister publicly suggested that Ontario should take steps toward harmonizing the province's retail sales taxes with the GST or, at the very least, transition the province's retail sales tax to value added tax.
I would hope that through my remarks I have shown that while our federal Conservative government may have significant policy differences with its provincial counterparts in Ontario on certain economic matters--