Debates of Feb. 24th, 2009

Opposition Motion—Securities Commission and Equalization

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, when the two exchanges merged, a few years ago, it was agreed that derivatives would be traded in Montreal. A derivative is not necessarily more risky, as a financial product, than any ordinary stock. Who would have thought that stocks from GM would be worth as little as they are worth now and that the company would be on the verge of closing down. In that sense, I do not think that the products traded at the Montreal Exchange are more problematic than the ones traded in Toronto or at any other exchange. It will be necessary to have international regulations to better evaluate the risks associated with new assets created by the financial system. The control will certainly need to be tighter than it has been for the past 25 to 30 years. We totally agree.

Unfortunately, one must recognize that the Conservative government is going against the flow of ideas presently discussed at the international level. I think namely of tax havens. Large countries in Europe have agreed to strengthen the rules, in order to restrict the use of tax havens, while the minister of Finance, in his budget, said that he is backing off on a previously announced measure, which aimed at restricting the use of tax havens. This is absolutely outrageous.

[Ted Menzies, Conservative, Parliamentary Secretary to the Minister of Finance]

Mr. Speaker, I will be splitting my time with the member for Mississauga—Erindale, who has done an exemplary job. Although he is a new member to the House, he joins us in the finance committee and brings a tremendous wealth of knowledge. We enjoy having him there. We enjoy the expert advice that he provides. His constituents should feel privileged to have him as their representative in the House. Whenever the next election may be, we look forward to more Conservatives joining us from the great province of Ontario.

From the onset, in the 360-page 2009 budget document it would be inconceivable for there not to be disagreement in the House on many initiatives contained within those pages. However, that should not distract members from remembering the majority of initiatives in the budget have received overwhelming support across Canada, including in Quebec.

While the Bloc Québécois will launch attacks chalked full of excessive hyperbole and mock outrage about the budget, I want to add a positive note to the proceedings here today. In their rush to condemn the budget as loudly and frequently as possible, it might have alluded our friends from the Bloc that a lot of people in their own province really liked it.

I wonder if, before condemning the budget, the Bloc actually read it and truly listened to the reactions of those in the province it claims to represent.

Did it listen to Laval Mayor Gilles Vaillancourt, who praised the budget as “an appropriate response to the situation we're living through”?

Did it listen to Robert Coulombe, head of Union des municipalités du Québec and Maniwaki mayor, who proclaimed it “extremely encouraging”?

Did it listen to Jean Perrault, president of the Federation of Canadian Municipalities and mayor of Sherbrooke, who heralded the budget for taking “concrete action to create new jobs, fight the recession and invest in a safer, greener, more competitive Canada”?

Did it listen to the Conference of Rectors and Principals of Quebec Universities that applauded the budget as it “will assist universities in catching up on a portion of their accumulated deferred maintenance, and contribute to efforts...to stimulate a rapid economic recovery”?

Did it listen to what the Board of Trade of Metropolitan Montreal said when it declared the budget was “on target with measures designed to support companies, including easier access to credit, tax breaks, and tariff relief to stimulate investment”? The list goes on and on.

We could literally spend all day reading the positive reactions in response to budget 2009 in Quebec, reactions that the Bloc has apparently not heard, read or seen. What, pray tell, incredulous Bloc MPs are now wondering caused such a glowing reaction to budget 2009 in la belle province? Again, we could literally spend all day answering such a question, but let me, in a most succinct and expedited fashion, attempt to educate the Bloc members across the way in my time remaining.

As we all know, budget 2009, Canada's economic action plan, will inject almost $30 billion in timely stimulus, equivalent to 1.9% of our GDP, into the Canadian economy this year.

Quebec, like all provinces, will benefit from this plan. Quebec will receive its share of $4.5 billion over two years for infrastructure projects such as roads, water and sewer system upgrades across the entire province. The plan also accelerates payments up to $75 million over two years for additional infrastructure projects.

The people and businesses of Quebec will see the federal government take less of their money, with action to keep EI rates low for 2009-10 and tax relief of $4.2 billion over the next five years, significant and broad tax relief ranging from increases in the basic personal amount, enhancements to the working income tax benefit, a $1,000 increase in the age credit, a temporary home renovation tax credit, along with targeted measures to support manufacturers and small businesses. Indeed, it is estimated that the temporary home renovation tax credit alone would save eligible Quebec taxpayers $553 million over two years.

Moreover, we are also investing billions in quality social housing, a move that would further stimulate the construction sector while also enhancing energy efficiency and providing a hand-up for low-income Canadians.

We are taking action to improve access to financing for businesses to obtain the resources they need to invest, grow and create new jobs and give consumers the adequate financing that they need. This is in addition to significant action we are taking to support businesses and communities with new assistance for sectors, such as forestry and manufacturing, as well as the regions and communities that depend on them.

We are also helping those hardest hit by the economic downturn by enhancing employment insurance and providing more funding for skills and training, including for older workers.

Other initiatives that would specifically benefit Quebec include: over $400 million to VIA Rail Canada to support improvements to the Quebec City-Windsor corridor; over $200 million to rehabilitate one of Canada's busiest bridges, the Champlain Bridge in Montreal; $2 million to develop a plan for the future of the historic Manège Militaire in Quebec City that was sadly ravaged by fire last year; millions for infrastructure to promote international cruise ship tourism along the St. Lawrence and Saguenay rivers; as well as millions for repairs, construction and reconstruction in three harbours in the Gaspé region. The list goes on and on. We could spend all day on it.

Having interjected that positive note into today's debate, I must now turn my attention to the Bloc's motion that would have us renounce a budget many Quebeckers are quite fond of, and what is worse, would do so on an exceedingly weak and flawed basis.

First, the assertion that transfers to Quebec have been, or will be, cut is utter and complete nonsense. Even a cursory examination of the figures quickly reveals this is not a credible position for any reasonable individual to take.

Under our Conservative government, total transfer support to Quebec is at an all-time high and will continue to grow. It currently stands at more than $17.6 billion, nearly a third of federal major transfer support to provinces, significantly greater than Quebec's share of Canada's population. In 2009-10, Quebec will receive over $8.3 billion in equalization, an increase of 74% over the last year of the previous Liberal government. This is the largest among equalization receiving provinces. What is more, Quebec's equalization payments as a percentage of the province's GDP is now at the highest level since the early 1980s. It is at an all-time high as a share of Quebec's program spending.

Second, the idea that the budget would be an intolerable intrusion, and I quote when I say that, into provincial jurisdiction with respect to securities is also just a myth. If one actually read the budget, one would clearly see we have pledged to enhance Canada's securities regulatory framework by working with willing partners to establish a Canadian securities regulator that respects constitutional jurisdiction, regional interests and expertise. I underline the word “willing”.

We have all heard the arguments in favour of improved security regulations, and I will not repeat them here today. However, I will quote from The Globe and Mail:

[I]f there had been a single national securities commission in Canada...the Caisse de depot...might not have suffered grave losses on ABCP [asset-backed commercial paper].... [T]he core economic interests of all provinces would be better served by national unity and a national investment marketplace.

In conclusion, I urge all members to actually read the budget, listen to the wonderful reaction we are hearing to it and vote no to this motion and yes to the positive document called our budget.

[Robert Vincent, Bloc, Shefford, QC]

Mr. Speaker, I find it interesting that our colleague would speak to us about the budget. If so many people find the budget so good and so perfect, then why does it talk about 0.7% of GDP when the IMF is telling us to invest 2% of GDP?

It so happens that 2% of GDP is a lot more than 0.7% of GDP. This 0.7% of GDP represents $20 billion when it should have been $40 billion. The government needs to double the amount already invested. If it wants to have a budget that it is in line with what the IMF has asked us to do, it will have to invest another 1.4%, which means it has to double the amount already invested.

The Americans have already invested 2.7% and we are just the poor cousins with 0.7%. The government says it has done a good job and presented a perfect budget, but it is missing 1.4% and twice the amount of money.

Can my colleague tell me when the government will invest the other 1.4% that the IMF is asking our country to invest?

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, the math the hon. member is doing is rather flawed. I think that I spoke about the increases in equalization.

The one thing I did not also refer to is the fact that this Conservative government has committed and continues to be committed to increasing health transfers to the provinces at 6% and social transfers to all the provinces at 3%. We have chosen not to allow the brunt of this recession to be borne by the provinces. We on this side of the House do treat all provinces equally.

[Daniel Petit, Conservative, Parliamentary Secretary to the Minister of Justice]

Mr. Speaker, I would like to ask a question of my colleague, who gave a good summary of what should not be done in Quebec. But what grabbed my attention the most was the last point he raised in his speech, and I would like him to tell us a little bit more on that.

Tomorrow there will be a statement by the Caisse de dépôt et placement regarding the loss of $38 billion. This was money invested by Quebeckers in the Caisse de dépôt et placement.

My colleague could share his thoughts on that. According to the Globe and Mail, this great loss might have been avoided had we had a national securities commission. In this case, these people were named by the Parti Québécois and the Liberal Party.

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, at committee in the last session we heard some of the terribly disturbing stories of those who were impacted by the frozen assets in asset-backed commercial paper. There were some sad stories. Some suggested their brokers did not even tell them that they were invested in asset-backed commercial paper.

These are the sorts of things that are part of a common securities regulator. Although it has been expounded upon here that we will work this across the country on a voluntary basis, the Bloc members are fighting that. In fact, we had people, probably their constituents, telling us that they were not protected but suggesting that they may have been protected. If there is any chance that we can protect investors in this country, we owe it to Canadians to make sure that we do everything possible to protect their investments.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, again, the question I have for the Conservative Party is, if we do move to a common securities regulator, what steps will there be to ensure that it actually has teeth so that it can go after the corporate hucksters who have been moving from one location to another? With the derivatives and penny stock scams, Canada is known as the wild west.

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, I am taking that as support from the NDP members and we welcome that. Although they did not read the budget, I guess they heard through osmosis that that is actually part of the budget. We welcome their support.

We think that a common securities regulator will provide the mechanisms to deter the bad practices of which the hon. member speaks.

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

Mr. Speaker, as a lawyer involved in corporate finance in Canada for 25 years, I can say that contrary to the Bloc motion, the current passport system does not function very well. Such a statement is naive and would only be made by someone unfamiliar with the corporate finance business.

Each year many Canadian companies and foreign companies choose not to raise funds on the Canadian public capital markets because of the expensive and cumbersome multi-jurisdictional securities regulatory process. I know from first-hand experience that hundreds of millions of dollars of capital funding business are lost each year to the Canadian investment industry because we do not have a single national securities regulator.

Frankly it is an embarrassment and it costs us jobs, excellent, high paying, high value added, tax-revenue-generating jobs. The spinoff effects of these lost opportunities are very significant to our economy.

In my view, the government's economic action plan provides much needed stimulus to our nation's economy that is timely, targeted, temporary and cost effective. I believe that the measures contained in our plan will lay the foundation for long-term growth.

As we all know, Canada is facing the domestic effects of an unprecedented global financial crisis. Our financial institutions, while strong and sound by international standards, face the double jeopardy of an unavailability of liquidity to provide much needed loans to business and a short-term negative economic forecast which causes them to hold back in making the loans and investments that Canadian business requires.

Credit-worthy Canadian businesses cannot access necessary sources of debt and equity to operate in a normal course and make the types of investments that will enable them to enhance their competitiveness and operate in a more environmentally sustainable way.

Hard-working families are justifiably worried about their jobs and financial security, and accordingly, are cautious about spending and incurring debt.

These are truly extraordinary times. This is not a normal economic downturn. Despite the fact that Canada's economy is in relatively much better shape than any G7 nation, thanks in large part to the previously implemented economic and fiscal policies of this government, we must take extraordinary steps now to offset the domestic effects of the current crisis in world financial systems.

Given Canada's very favourable debt to GDP ratio, we have an opportunity now to borrow modestly at historically low interest rates and put that money to work for all Canadians to soften the impact of a financial crisis created beyond our borders and to help our economy emerge stronger, more competitive and a leader in cutting edge technology in industries.

The economic action plan is a coordinated plan which will simultaneously protect jobs through critical support for the auto industry, tax incentives for new investments in production machinery and environmental technologies, and generous enhancements to employment insurance.

It will create new jobs through immediate and strategic investments in roads, bridges, public buildings, colleges and universities, investments which will enhance the efficiency of our economy and improve the quality of life for Canadians throughout this great land.

It will maintain and create further jobs by incentivizing consumers to purchase homes and automobiles and to renovate existing homes to enhance their value and energy efficiency.

It will also protect the most vulnerable in our society by providing significant new support for training for those laid-off workers, to give them the knowledge and skills required to shift into new and emerging industries.

It will provide tax cuts for hard-working, low income Canadians and significant investments in affordable housing.

The economic action plan is proof that we listened and we delivered. The Prime Minister, the Minister of Finance and all of our members of Parliament met across the country with thousands of individuals, businesses, municipal and provincial governments and other stakeholders. This broad and comprehensive consultation process elicited many good suggestions which are reflected in the economic action plan.

As a Conservative member of the parliamentary Standing Committee on Finance, I participated in meetings with over 45 stakeholder groups. In my home province of Ontario, I met with the Region of Peel, the City of Mississauga, local boards of trade, labour groups, charitable and social welfare organizations, and ordinary citizens at public town hall meetings. In all of these consultations there quickly emerged a consensus on broad initiatives to stimulate our economy and protect workers and the most vulnerable in our society.

I am pleased to acknowledge that these important and desired initiatives have been included in Canada's economic action plan.

We were advised by the Mississauga Board of Trade and many others to revise the employment insurance program to help save jobs through work sharing. We responded by extending support for work-sharing agreements by 14 weeks.

I would like to read from a press release by the Mississauga Board of Trade in which it describes how the government responded to its requests. The headline reads, “Federal budget is a positive step forward for business and economy”. The statement reads:

Mississauga Board of Trade was pleased to see the federal government present a budget that took extraordinary measures to address an extraordinary economic climate.

...MBOT President & CEO, Sheldon Leiba, [said] “Now we have the confidence that the federal government has a plan and strategy in place to restore our economy and achieve long-term competitiveness”.

As the city’s leading business association, Mississauga Board of Trade developed a pre-budget submission that was sent to the Federal Minister of Finance and local MPs and was presented at a local pre-budget consultation meeting hosted by Mississauga-Erindale MP and Conservative member, Bob Dechert.

In his Budget speech, Finance Minister Jim Flaherty responded positively to a number of Mississauga Board of Trade’s proposals--

[The Acting Speaker, Conservative, Barry Devolin]

I must interrupt the member. It is inappropriate to use the names of members of Parliament while speaking.

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

Mr. Speaker, I was just reading from a press release.

In his Budget speech, [the] Finance Minister...responded positively to a number of Mississauga Board of Trade’s proposals to mitigate the impact of the recession and strengthen the economy....

Mr. Leiba said:

While the coming months will continue to be tough for many residents, employees and businesses, the fact that we now see a clear strategy should help to begin restoring consumer and investor confidence. We believe it is a positive step forward.

We were asked by employers and labour representatives to help laid-off workers by extending benefit periods to account for extra time required to find alternative work. We responded by increasing employment insurance benefit entitlements for a further five weeks.

Colleges and skills training organizations suggested that we assist workers forced to transition to new and different industries. We responded by increasing funding for training delivered through the employment insurance program by $1 billion over two years and by investing $500 million in the strategic training and transition fund and investing a further $2 billion to expand facilities at post-secondary institutions.

Skilled new Canadians in Mississauga and across Canada continue to struggle with the recognition in Canada of their foreign credentials to allow them to utilize their much needed professional skills and knowledge for the benefit of all Canadians. We responded by providing $50 million over two years for a national foreign credential framework in partnership with provinces and territories.

Business owners told us that they needed increased access to credit to continue to finance their operations in the normal course, to keep workers employed and to make new investments in competition enhancing production equipment and new technologies. We responded by providing up to $200 billion through the extraordinary financing framework through a variety of measures to allow businesses the financing they need to invest, grow and create new jobs and by creating the Canadian secured credit facility with up to $12 billion to support the financing of vehicles and equipment for consumers and businesses.

We were asked by the city of Mississauga, the region of Peel and community action groups to help protect the most vulnerable in our society by assisting the municipalities with the provision of affordable housing. We responded by providing approximately $2 billion through a variety of measures for renovating, retrofitting and new construction of social housing.

I would like to read from a press release from the region of Peel released yesterday in which it describes how the government offers to support families and businesses in Peel. The headline reads, “Peel Community to Benefit from Federal Budget”. The statement reads:

The federal government’s 2009 budget announced yesterday offers support to families and businesses in Peel.

Canada’s Economic Action Plan identifies budget measures such as the expansion of the Working Income Tax Benefit, the National Child Benefit Supplement, and the Child Tax Benefit that will support low-income working individuals and families.

“The priority areas identified in the budget are consistent with Regional Council’s recommendations to the provincial and federal governments,” said Regional Chairman Emil Kolb. “We are also pleased to learn of the new investment for infrastructure and remain committed to working in partnership with the provincial and federal governments to help expedite funding for our projects.”

At our town hall forum in Mississauga, ordinary, hard-working families and seniors told us that they needed tax relief and incentives to help them provide for their families. We responded by delivering meaningful tax relief to low and middle income Canadians.

[Robert Vincent, Bloc, Shefford, QC]

Mr. Speaker, I listen to the eminent Conservatives telling us one after the other that a single Canadian securities commission is the best way to go. As an example, let us say that we have a family of 12 children. They have been married and living on their own for 25 or 30 years. All of a sudden, the mother-in-law decides to manage the money of each of these families. This is what the government has in mind right now. For many years, commissions have been building up their organization in each province. Therefore, they are able to decide and make laws accordingly.

Why would we want to have a mother-in-law manage our business and interfere in our fields of jurisdiction to tell us what to do? Establishing a single Canadian commission is equivalent to that.

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

Mr. Speaker, in 25 years of working in the corporate finance business, I can tell my colleague that the cost of doing any capital fundraising in Canada is much greater than it needs to be and is much greater than in any other country of comparable size. This results in higher costs to the company, to consumers and to those investors.

In many cases, Canadian investors do not have the opportunity to invest in good companies that would be listed on Canadian stock exchanges simply because of this cumbersome, expensive, multi-jurisdictional process that makes it difficult and expensive for companies to list on Canadian exchanges and therefore list elsewhere. For example, they will not be able to invest in some of those companies through their RRSPs.

[Robert Vincent, Bloc, Shefford, QC]

Mr. Speaker, as for the stock exchange lists, we have specialists in Quebec who can tell us what we should do. It is always more difficult when the federal government is meddling everywhere. Everything becomes so complicated. Just the feasibility study for this project cost $150 million. Earlier today, there was some discussion about employment insurance. The program for older worker adjustment would cost $35 million for all of Canada. Therefore, just with the money spent on the study, the program could have been offered for five years to workers 55 years of age and older across Canada, to help them make their way out of the recession. I would like to hear what my distinguished colleague has to say about this.

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

Mr. Speaker, the tax revenue that would be generated by moving to a national securities regulator, which would be in the hundreds and perhaps billions of dollars in deals that are not currently being done in Canada, would provide significant more funds for things like employment insurance and all the other programs that we find so important and want to deliver to our constituents.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I took the opportunity to look on the web and I found an article by Jack Mintz who has advised the government on a number of occasions. I think he tends to concur with the member's argument to some extent. He indicates that to have a regulator in P.E.I., which is about the size of Red Deer, et cetera, does not make a lot of sense but that the synergies and things that businesses can learn and benefit from the integration of a securities regulator.

I wonder if the member would care to give another example of some of the benefits to businesses and therefore to Canadians.

[Bob Dechert, Conservative, Mississauga—Erindale, ON]

Mr. Speaker, by concentrating the regulatory process in one national securities regulator there would be a lot more synergies between the finance business across Canada. It would be a great way to ensure we have people from across Canada who understand one system and it would make our markets much more efficient. As the hon. parliamentary secretary referred to earlier, it would make our markets safer and our regulatory requirements more enforceable if we had one national securities regulator.

It has often been stated in the financial media that some of the offences that have been prosecuted in the United States, for example, do not succeed currently in Canada but would succeed if we had a national securities regulator.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

Mr. Speaker, I will be sharing my time with my colleague from Jeanne-Le Ber.

I will start by reading out the motion put forward this morning by the hon. member for Saint-Maurice—Champlain. It states:

That, in the opinion of the House, the government should immediately renounce two measures contained in the recent budget:

(a) establishing a national securities commission, because establishing such a commission would constitute an intolerable intrusion into Quebec’s jurisdiction, and the current passport system functions very well; and

(b) unilaterally amending the equalization formula, since the Prime Minister, in a letter to the Premier of Quebec dated March 19, 2007, promised that transfers to the provinces would be predictable and long term, and should also comply with the government of Quebec’s request to give the revenues generated by Hydro-Québec’s transmission and distribution activities the same treatment, regardless of the equalization calculation, as that given Hydro One’s revenues.

It should be pointed out that Quebec's National Assembly unanimously passed such a motion on the eve of the federal-provincial prebudget meeting. This goes to show that all parties represented at the Quebec National Assembly are calling for the federal government to examine the demands in that motion.

Regarding the securities regulator, I would like to make the following points. Securities regulation comes under the exclusive jurisdiction of Quebec, and the federal government has to respect that. Establishing a national securities commission would create a regulatory monopoly, which is dangerous because of how highly concentrated the regulated industry is, and cause Canada to lose the benefits from the current regulatory competition. There are few indications that such a structure would reduce direct costs. However, a system based on harmonization and mutual recognition such as the passport system has advantages that have in fact prompted the European Union to opt for that type of securities regulation.

The current passport system works very well. It allows for a coordinated approach to the enforcement of the legislation and uniform protection for investors. In addition, the current system has enabled each securities commission to develop its own approach and areas of expertise, which provides for a variety of complementary points of view on how the rules are being complied with. The system would be more effective, however, if Ontario decided to stop trying to go it alone and joined the other provinces.

The differing but complementary points of view may be more onerous, but they actually help us to detect and prevent scandals like the ones in the United States, which has had a central authority for the last few years. These scandals have resulted in social costs that are much more grievous. The current system with its 13 commissions assures investors that the rules take a variety of views into account and representatives from the small markets counterbalance those from the main markets.

These nation-wide initiatives fail to take regional particularities into account. Canada is characterized by a heavy concentration of brokerage firms and certain other key players in the financial markets, and healthy competition among the various securities commissions is therefore actually a plus. The Autorité des marchés financiers is our final line of defence against the disappearance of the Montreal stock exchange after its acquisition by the TSX. The Autorité des marchés financiers still has the regulatory authority to require the continuation of exchange activities in Montreal. The Montreal Exchange is still regulated by the AMF, which has the power to set the rules governing how the Exchange will operate, including the percentage of shareholdings.

In a recent study of economic outlooks, the OECD rated Canada second for its securities regulation. In addition, in a report on world financial systems, the World Bank described Canada as a leader in the securities business. As things currently stand, the securities commissions of Quebec and the provinces can all appear before the International Organization of Securities Commissions.

The Constitution states that securities are a provincial matter and every jurisdiction has the right, therefore, to appear without intermediaries. Quebec and the provinces must keep the voices they are entitled to on the international stage.

I want to speak now about the equalization formula, which is part of today’s motion. The budget implementation bill includes a change to the formula for calculating equalization. Under the new formula, Quebec’s increase in equalization payments will be cut by nearly $1 billion. The change will shave $991 million from the equalization payments Quebec will receive in 2009-10.

Once again, the federal government is dumping its problems onto the provinces. This is a patent illustration that fiscal imbalance has not been fixed. When the purse strings are tightened in Ottawa, the provinces pay the price. What is more, it is maintaining the increased transfer payments to wealthy Alberta in their entirety, while reducing payments to the less well off provinces, which is totally illogical.

The only defence there can be against Ottawa's changing moods is replacement of the transfer payments to the provinces by the equivalent tax room. The Bloc Québécois intends to continue to fight for the fiscal imbalance to be dealt with once and for all, and for the equalization ceiling to be done away with.

Right in the midst of the holiday season, the government published its changes to the way Hydro One revenues would be used in calculating equalization payments to Ontario in the Canada Gazette. This was done over the holidays so that it would get by unnoticed. The federal government will in future consider the revenues generated by Hydro One as corporate revenue rather than natural resource revenue.

Two thirds of Hydro-Québec's revenues come from its transmission and distribution activities, and the remainder from the generation of electricity. By refusing to give the revenues generated by Hydro-Québec's transmission and distribution activities the same treatment as Hydro One, the Conservative government is depriving Quebec of an additional $250 million annually. The Bloc Québécois intends, as follow up to the letter sent by the Government of Quebec to the government, to call for Hydro-Québec revenues to be treated fairly.

I would like to state in closing that Quebec is not the spoiled child of Canada. The myth that Quebec gets everything and gives nothing is particularly prevalent in the west. That is, however, far from the reality.

First, if it is true that Quebec receives the lion's share of the equalization pie, this is merely because Quebec has a large population. In 2008-09, Quebec will receive the lowest transfer payment per capita.

Given that the budget unfortunately has nothing but crumbs to offer to the economy of Quebec and given that the government has recognized that Quebeckers form a nation, I urge all hon. members present to support this motion to remove these two measures that are reductive for Quebec.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I thank the member for his comments. There is a very interesting debate on the securities regulation side. Marcel Boyer, who is the chief economist for the Montreal Economic Institute, argues:

--uniform standards and regulations, provide more thorough accounting, let issuers and investors benefit from economies of scale, assume a more direct role as Canada's spokesman in the international harmonization of securities regulation and facilitate the establishment of a national tribunal in this area.

He is talking about economies of scale, learning from each other, and being able to respond quickly in times of crisis, which Canada certainly is in right now. I wonder if the member would like to comment on Mr. Boyer's argument that there are significant benefits, including economies of scale, to having a national securities regulator.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

Mr. Speaker, I would like to thank my colleague for his question.

I do not share that opinion. As I said, Quebeckers have a distinct culture, and this government has recognized them as a nation. Quebec's distinct nature must be preserved in a securities commission so that it can make its own rules about investment and business, so that the people of Quebec can express themselves through their own businesses. Compared to any other province that thinks of itself as Canadian, this is very different. We Quebeckers want to hang on to our priorities because they work for us. This proves that we would have no trouble maintaining our existing system.

[Robert Vincent, Bloc, Shefford, QC]

Mr. Speaker, in his speech, my colleague said that if Canada were to create a Canada-wide securities commission, Quebec would lose its voice at the International Organization of Securities Commissions.

Does my colleague think that we will be left out in the cold, just as we have been at UNESCO?

[Robert Carrier, Bloc, Alfred-Pellan, QC]

Mr. Speaker, that is yet another example of the government trying to silence Quebec. If we have a Canada-wide commission, Quebeckers will be subsumed under the Canadian delegation and will have no voice. It will be just like it is at UNESCO, even though the government claims to have given Quebec a voice. As it turns out, we have a voice, but only if we agree with Canada. Once again, Quebec is being denied the opportunity to express itself internationally. Our ability to express ourselves will be thwarted by the Canada-wide commission.

[Nicolas Dufour, Bloc, Repentigny, QC]

Mr. Speaker, as my colleague was saying, we would lose our voice on the international scene.

I would like to know if my colleague agrees with me on this. If everything is centralized in Toronto like the government wants to do, would we not be losing our voice within Canada?

[Robert Carrier, Bloc, Alfred-Pellan, QC]

Mr. Speaker, I thank my colleague for this other question.

Obviously, not only would we lose our voice on the international scene, but the only reason for having a national commission is that everything would be centralized in Toronto. We will no longer have the opportunity to express our own opinion, and it is important that we not lose that.

[Thierry St-Cyr, Bloc, Jeanne-Le Ber, QC]

Mr. Speaker, I am pleased to rise in the House to speak to the Bloc Québécois motion put forward by the member for Saint-Maurice—Champlain. I will take the time to read the motion again:

That, in the opinion of the House, the government should immediately renounce two measures contained in the recent budget:

(a) establishing a national securities commission, because establishing such a commission would constitute an intolerable intrusion into Quebec’s jurisdiction, and the current passport system functions very well; and

(b) unilaterally amending the equalization formula, since the Prime Minister, in a letter to the Premier of Quebec dated March 19, 2007, promised that transfers to the provinces would be predictable and long term, and should also comply with the government of Quebec’s request to give the revenues generated by Hydro-Québec’s transmission and distribution activities the same treatment, regardless of the equalization calculation, as that given Hydro One’s revenues.

I wanted to reread the motion to underscore these two aspects, which are fairly disparate, but which share a common element—they show us once again the limits of federalism. They show that Quebeckers, even though they all agree, even though the 125 members of their National Assembly voted unanimously on a matter, cannot go forward and cannot build the nation or country they would like because they are restricted by a federal framework in which they are a minority.

As a Bloc MP, I will obviously continue to convince my fellow citizens that the best way to get out of that is to become a sovereign country, to become a nation like Canada. It is a big and beautiful country. It is simply not Quebeckers' country and not the country where they can realize their full potential.

Since we must, let us have a closer look at the two parts of this motion and see what it means for Quebec. I will begin with the second part, the one involving the equalization formula. When we meet our electors and talk to them about our work in Ottawa, equalization is rarely the topic they find most exciting or appreciate most. To be honest, it involves a lot of figures and theory. Still, it is vitally important. In theory, this formula should allow each province to provide equivalent services and to set equivalent rates of taxation. In theory, the formula should be based on a number of principles, with the primary one providing that the provinces' fiscal capacity—their ability to tax and gather revenue—be evaluated. Those provinces whose fiscal capacity is less than the average will receive the amount of equalization that brings them up to the average.

That is the theory. The problem is that, for years, there have always been one-time agreements that stray from this principle. These agreements, surprise surprise, always penalize Quebec, no matter how you look at it. By way of example, I offer the decision to exclude a portion of non-renewable natural resources from the calculation of equalization. Once again, it may seem quite technical, but it means in simple terms that the provinces producing oil or other non-renewable resources appear poorer for the purposes of equalization calculations. And so they are entitled to more money. Conversely, provinces like Quebec, which relies primarily on renewable resources, appear richer than they are in fact. In the end, they get penalized.

This is what we explain at the end of the motion. We refer to the federal government's latest brainwave, which is to treat the revenues of Ontario's Hydro One and Quebec's Hydro-Québec differently. Oddly enough, once again, Quebec loses out in equalization payments by $250 million.

And what does it mean for Quebeckers?

First of all, it means that we have a system that does not take our reality into account, and second, it means that our government is unable to predict the revenues it will be receiving from the federal government. Incidentally, those revenues come from the income taxes paid by all Canadians, Quebeckers included. Equalization is not a gift, but a mechanism for redistributing the wealth drawn from our very taxes. So we find ourselves in a situation where, according to Ottawa’s mood, these transfers to Quebec are going to change.

At the beginning of the previous mandate, when the Conservative government announced in this House that it had resolved the fiscal imbalance, the Bloc Québécois immediately said that it had not. First, the size of the amounts involved was insufficient, but basically, there were no tax transfers. When the people on the Séguin Commission convened in Quebec and introduced this concept of the fiscal imbalance into the public arena, they were not drawing two words at random from a hat. They called it a fiscal imbalance because it was an imbalance of a fiscal nature. The solution inevitably was to restore the balance with a fiscal solution.

In Quebec, there was therefore a unanimous demand that revenues be transferred to the Government of Quebec. They could have transferred tax points, or a field of taxation like the GST. This was not done. They transferred a sum of money and confined themselves to that. Today, with a stroke of the pen, the federal government can say that this year it is dropping transfers $991 million below what Quebec had expected, that the Government of Quebec will have to make do with that. We saw this in 1995. The Liberal finance minister of the time slashed transfers of all kinds to the provinces. So we have always had to live with this sort of problem.

Obviously, within the current federal framework, the Bloc Québécois will continue to defend the interests of Quebeckers. In the long term, the only way to fully control our financial resources is to become a sovereign country, like Canada. We must become a country that is able to participate in the world community in order to decide where our revenues will be allocated each year and to carry out long-term planning.

The second part of the motion concerned the securities issue. Once again, there is a consensus in Quebec, that is, total unanimity, from the unions to management, on the left and on the right. Imagine what you will, because everyone says and maintains that the securities commission must remain an exclusive jurisdiction of Quebec. And yet a Canadian securities commission is to be imposed on us.

No one in Quebec is fooled by the government’s trick of saying that this will be optional. The choice will be clear for a foreign company coming to set up operations in Quebec, for example, a company that will have the choice between the national securities commission and the Quebec commission using passport systems. Quite possibly the other commissions will eventually wither and die. The choice will be obvious. If two regulatory bodies are in competition, the one that imposes the fewest restrictions on companies will attract the most companies. This makes no sense. This trick of saying it is optional is window dressing. The reality is that they want to make the Commission des valeurs mobilières du Québec disappear and centralize everything in Ontario, principally Toronto.

For Quebec, it means losing powers and leverage when it comes to influencing economic decisions that are important to us. In the current Canadian framework, we are nowhere near open federalism or any attempt to seek additional powers; we keep going backwards. My guess is that, sadly, this motion will not be passed, because the two main federalist parties will not support it. This motion reminds us, however, that the only choice for Quebec is to become a sovereign nation, a great country like Canada. Then, our countries will be able to work together on new bases.