Debates of Feb. 24th, 2009

Opposition motion—Securities commission and equalization

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Mr. Speaker, I would like to thank my colleague, who interrupted her passionate discourse to give me a little time to speak. I am sure that she would have had no trouble using up all of the allotted time.

In our motion, we are asking the government to drop two measures. My colleague and I agreed that she would talk about the Canada-wide securities commission, and I, the Conservative government's unilateral amendments to the equalization formula. In a letter to the Premier of Quebec dated March 19, 2007, the Prime Minister promised that transfers to the provinces would be predictable and long term. In respect of calculating equalization, he should also agree to the Government of Quebec's request to treat revenue generated by Hydro-Québec's transmission and distribution activities the same way Hydro One's revenues are treated.

It is clear from the positions taken by other parties in this House that the only members who are standing up to protect the interests of Quebeckers are the Bloc Québécois members. There is a reason that, in election after election, we win a vast majority of the seats in this House: when the time comes to stand up for Quebec's interests, we are the only ones who represent the Quebec nation.

Members of other political parties in Quebec will vote against this motion. Today, I am asking the government not to make changes to equalization, but this is not a Bloc Québécois request; it is a unanimous National Assembly of Quebec demand. I would be happy to explain. We have the support of Quebec's finance minister, Ms. Jérôme-Forget, who wrote a letter to Canada's Minister of Finance asking for what we are asking for today. She did not write the letter 10 years ago. She wrote it on January 21, 2009, and I will speak about that later.

Everyone knows that Ms. Jérôme-Forget's political allegiance is not the same as ours, and that nobody on our side voted for her party during the last election. Even though we are not supposed to say for whom we voted, we can say that because everyone knows it.

That is the reality. Why? Because equalization is part of the very foundation of a federation. Canada is not the only federation that shares its resources among its various constituent communities, which are called provinces here. Germany, Switzerland, Australia, India, Pakistan and South Africa have equalization systems similar to ours. The United Kingdom also has an equalization system that reflects the needs of Scotland, Wales and Northern Ireland. Equalization is not unique to Canada, but can be found in other federations as well.

The big question is whether Canada is a true federation. We can always discuss this, but the fact is that the equalization system is in place so that people will have access to public services at reasonably comparable levels of taxation. The purpose of equalization is to try to distribute wealth more proportionally throughout the federation.

Do you think Quebeckers like getting equalization? They do not, because it is a sign of poverty. Quebec is less wealthy than certain other provinces, even though other provinces also receive equalization payments. But other provinces like Ontario, British Columbia and Alberta are wealthier. We can break all that down.

As for the aid given to the auto industry, the wealth this industry generates does not even benefit Quebec. We had an auto manufacturing plant, but it closed a decade ago. Obviously, we are very happy to have some suppliers, but the auto manufacturing companies are all in Ontario.

The good jobs are therefore in Ontario, and household incomes there are higher than in Quebec. That is why we receive equalization. But it is a myth that Quebec is the spoiled child within Canada.

When we look at the provinces that receive equalization, we see that Quebec gets more. Why? Because its population is larger. But Quebec gets the least money per capita, with $1,037 in 2008-09. Nova Scotia receives $1,679 per capita; Manitoba receives $1,732; Newfoundland receives $1,781; New Brunswick receives $2,111 and Prince Edward Island receives $2,310 per capita.

The total amount Quebec receives is higher, but it is not true that people are treated equitably on a per capita basis. Obviously, the provinces and the Government of Canada debate this.

As for the division of the equalization formula, there seemed to be agreement. We were all aware of that. The Prime Minister had written to the premier of Quebec in 2007 to tell him that, at last, he had decided to review the formula for calculating equalization payments, within the framework of addressing the fiscal imbalance. We even voted in favour of the 2007 budget, and that is no secret. There was unanimity in Quebec. All political parties were in agreement. The decision was made to give the government a chance. Yet the government was the source of the problem. It has reduced equalization because it has a reduced revenue. It has a reduced revenue because it has reduced the GST. That is the Conservative reality. Now they are trying to scrape up a little money here, a little there, and once again are picking on equalization, which is a revenue calculated into the budget of the province of Quebec. They are saying all manner of things on this subject. The Minister of Finance says the provinces were aware of the new method for calculating equalization, that it was not done unilaterally.

I will read the opening paragraph in the letter that Quebec finance minister Jérôme-Forget wrote to the federal Minister of Finance. It says:

Dear Colleague,

In recent days, federal government authorities, yourself and other representatives of your government included, have affirmed that all pertinent information on the changes you are contemplating to equalization was shared at the federal-provincial meeting of finance ministers held last November 3 in Toronto.

That is incorrect. Allow me to rectify this.

These are not my words. It is a letter from the Quebec finance minister to the federal Minister of Finance in Ottawa. Let all those who have come here saying there was an agreement know, it is not true. And that includes all the Quebec Conservative members who have gone and told Quebec and their fellow MNAs that it was not their fault, that there was an agreement. There was no agreement. The Quebec Conservatives need to wake up. There was no agreement. Period. She wrote that letter and I have a copy.

Perhaps, Mr. Speaker, would you give me permission to table in this House a copy of the letter written by Minister Jérôme-Forget to the Minister of Finance on January 21, 2009?

Do I have leave of the House to do so?

[The Acting Speaker, Conservative, Barry Devolin]

Does the hon. member have the consent of the House to table this document?

[Some hon. members]

Agreed.

No.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Mr. Speaker, I do not have the House's consent. Once again, it is a sign of how this federation works. A provincial finance minister wrote to the federal Minister of Finance. I am asking for permission from the House to table that letter, which is a public letter. I have copies of it. It is not from a minister affiliated with our party. It is a letter from someone who represents Quebeckers, and I am being denied the right to table the letter in this House. That is how the Canadian federation works, and that is what we deplore. Once again, not one Quebec member from the other parties stood up to tell his or her colleagues that it might be important for everyone in the House of Commons to know what is written in the letter dated January 21, 2009, from the Quebec finance minister to the federal finance minister. Once again, we are being denied.

It is no accident that in one election after another, the people of Quebec choose members of the Bloc Québécois to represent them in this House. Once again, we are the only ones who fight to ensure that Quebec is treated equally in the federation. This will continue until Quebec decides to stand on its own two feet and stop sending more in tax money than it gets back. We still hear plenty of myths, including one that we have revenues only because we receive equalization. However, we send more tax money than we receive. That is the reality. Equalization is tax money paid by Quebeckers. Of course, if we receive more in equalization, that is because we have a larger population and we pay more income tax than many other Canadian provinces.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Mr. Speaker, I heard my colleague talk, in his excellent presentation, about the different parts of the motion tabled today. He mentioned an important aspect at the very beginning of his speech concerning the problem caused by the government's decision to give preferential treatment to Hydro One, in Ontario, compared to Hydro-Québec, in Quebec.

The transmission and distribution of electricity in Quebec represents two thirds of Hydro-Québec's activities. The Conservative government refused to consider this when calculating the dividends paid by Hydro-Québec to the government. I would like to hear the member for Argenteuil—Papineau—Mirabel talk about the unfairness of this decision which has resulted in the loss of $250 million in additional equalization payments to Quebec.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Mr. Speaker, I thank my colleague for Saint-Maurice—Champlain, who is our finance critic and does an excellent job, for allowing me to make some clarifications. Had I been permitted to introduce the letter, no explanation would have been required. My colleague knows that. Ms. Jérôme-Forget is Quebec's minister of finance. In the letter she wrote to the Minister of Finance on January 21, she said:

I also want to raise a matter of vital importance to Quebec that was raised...at the meeting of First Ministers—

On November 14, 2008, your officials advised their provincial counterparts that changes to the equalization regulations were under consideration...One of them concerns a change to the treatment of dividends paid by Hydro One to the government of Ontario. The federal government has decided to consider this source of revenue under the corporate tax base rather than the natural resources base. The argument made by your department is that this enterprise transmits and distributes electricity, but does not produce it.

However, it should be understood that two thirds of Hydro-Québec's revenues are generated by the distribution of electricity. That is also the case for Hydro One. The minister concluded by stating that “this unfair treatment will deprive Quebec of an amount estimated at more than 250 million dollars per year.”

Once again, colleagues from the other parties should not—

[The Acting Speaker, Conservative, Barry Devolin]

Questions and comments. The hon. member for Lévis—Bellechasse.

[Steven Blaney, Conservative, Lévis—Bellechasse, QC]

Mr. Speaker, I would like the member for Argenteuil—Papineau—Mirabel to rethink his speech. Equalization is a Canada-wide system that distributes wealth. Quebec receives more money than other regions of the country because of the equalization formula, which is an advantage of federalism for Quebec.

That said, is the member for Argenteuil—Papineau—Mirabel willing to acknowledge that this year Quebec will receive a record equalization payment of $8.3 billion? Is he willing to acknowledge that equalization will continue to increase under the new formula we have put in place? Quebec is receiving more than it did last year. In fact, it is receiving 70% more than it received before we came to power. Is he willing to acknowledge that, thanks to the Conservative government, Quebec is receiving more equalization? If that is the case, why is he against the budget when this money will be transferred to Quebec?

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Mr. Speaker, I understand that this Conservative member from Quebec does not want me to table the letter from Quebec's minister of finance. He would have understood everything if he had read closely. What he is telling us is partly true. The problem is that his government decided to correct the fiscal imbalance. However, with these unilateral measures, the Quebec government will lose $250 million of revenue from Hydro Quebec and $500 million from the equalization formula. Money is doled out with one hand and snatched back with the other, all because the Conservatives have made poor budgetary decisions. That is the Conservatives' responsibility.

Even if he gets all worked up today to tell us that we should be happy, we are not happy because Quebec is not happy. If Quebec is happy, it will be clear during the next election.

[Mario Silva, Liberal, Davenport, ON]

Mr. Speaker, I am quite honoured to participate in this debate on the motion that has been brought forward by my colleagues from the Bloc.

In their motion before the House, they denounce the government for two recent actions that were included in the budget. One is the establishment of a national security commission. The other is the unilateral amendment of the equalization formula. Both issues are important, but I must say that they are incorrectly phrased by my colleagues from the Bloc. I think it is important that we take the time in the House to debate this issue and look over some of these items.

First of all, I am not personally opposed to the establishment of a national securities regulator. However, it has to be done in a constitutionally sound manner. Therefore, as my leader has stated, the government should make reference to the Supreme Court prior to proceeding with this plan. I think that is the only fair way and the only way to know that we are acting within the law as well as with the authorization and support of the Supreme Court.

As a party, we remain committed to exploring the national system of securities regulators in cooperation with the provinces and in accordance with the Constitution to enhance coordination and regulation, while maintaining the ability to address unique regional needs. If the United States, our largest trading partner, had a common securities commission and regulator for every state, one can only imagine that it would be very difficult. One of the things we have to realize in this global crisis that is taking place is the important need for us to cooperate and have agencies working together to cut through red tape. That is so important. I think even my colleagues from the Bloc would understand the importance of removing red tape. Red tape can be an obstacle to economic growth. We are living in a global village and times have changed.

It is important to know that securities legislation in Canada and around the world has two main objectives: to protect investors and ensure that capital markets are efficient, fair and transparent. Regulatory discrepancies among jurisdictions in terms of public disclosure and information sharing between companies and investors can create distorted markets and increase risk to investors, both of which are undesirable for economic stability and competitiveness.

Generally, securities regulators administer four broad areas. First, raising capital through sale of securities such as private placements and initial price offerings. Second, ensuring that companies are transparent and continuously disclose relevant investment information. Third, enforcing securities regulations and deterring misleading or deceitful behaviour; and fourth, ensuring traders of securities are qualified, reputable and licensed.

Some provinces have taken different views on this issue. We know that Alberta, Manitoba and Quebec currently oppose the idea of a single regulator, while my home province of Ontario and British Columbia are voicing their support. In October of 2007, the National Assembly of Quebec unanimously passed a motion for the federal government to abandon its Canada-wide securities commission project. It has been stated many times here in the House by my colleagues from the Bloc.

One argument presented by the provinces will be that securities regulation is clearly a provincial area of jurisdiction under the property and civil rights power of the Constitution subsection 92(13) and the federal government should not intrude. In today's regulatory environment, securities in Canada are subject to the rules and regulations of 13 different provincial and territorial regulators, creating a fragmented regulatory framework that serves to hamper investment in Canadian companies.

Some of the specific criticisms of the current fragmented approach include, for example, trying to raise capital. It is expensive to comply with all the provincial laws. Raising capital is time sensitive and compliance with all of the different rules hold up commencement of trading.

Investors in smaller provinces can be denied investment opportunities. Because of the small and fragmented nature of current securities regulation, enforcement is difficult and not adequately funded.

In support of the current multi-jurisdictional model, provinces argue: it allows for the development of more innovative ideas that can adapt and respond better to unique regional markets; it can more efficiently enforce regulation as they acquire experience and expertise in their regional markets; a single securities regulator may impose compliance rules tailored for larger multinational users and may squeeze out smaller regional companies from accessing capital; and it protects regional securities infrastructure that provinces have developed with accountants, lawyers, underwriters and other professionals.

These are some of the issues that have been raised both for and against by the different provincial jurisdictions. These arguments are valid on both sides.

At the same time, I would go back to my earlier argument, and that is, given the financial uncertainty happening around the world and the crisis also taking place, this would be a unique time to go forward with this initiative provided that it does have constitutional support.

We should look as well to see if we can move forward in co-operation with the provinces. It is important that we have the provinces on our side in dealing with this issue. The government talks at great length about its co-operation with the provinces, but it has the backs up of many provinces that feel they are not being treated fairly.

To address the criticisms, all the provinces and territories, with the exception of Ontario, have created the Canadian Securities Administrators, a forum for securities regulators to coordinate and harmonize Canada's regulatory system. The CSA, as it is called, has successfully implemented several initiatives, including a passport system for a single window of access and recognition to participate in all of the regional capital markets.

On March 17, 2008, the passport securities system moved to its next step and any prospectus approved in one jurisdiction will be recognized in all others save for Ontario. The CSA has also implemented a harmonized Internet SEDAR system for information disclosure and a streamlined national registration system for traders.

In 2006 the Crawford panel, a panel commissioned by the Ontario government to look at securities regulation, recommended adoption of a single securities regulator.

In 2003 the Liberal government set up the wise persons' committee to adopt a single regulator to address the issues of regulatory barriers, fees and enforcement. This was supported at the time by the Canadian Bankers Association and the Investment Dealers Association of Canada. The wise persons' committee recommended a national system based in Ottawa with strong, functionally empowered regional offices in Vancouver, Calgary, Winnipeg, Toronto, Montreal and Halifax.

In 2004 the Liberal government agreed with the CWP conclusion that the best possible securities regulatory structure was a single securities regulator and pledged that it would work with provincial and territorial governments to move this forward.

That is the historical background of what has taken place over time on this issue.

The Conservative government and, in particular, the Minister of Finance consistently stated their intent to implement a national securities regulator in budget 2006. Then the government in March 2007 published “Creating a Canadian Advantage in Global Capital Markets”, which included the creation of this expert panel. This commitment was reiterated in the 2008 budget.

At the request of the Minister of Finance, the International Monetary Fund, in 2008, completed a report calling on Canada to move forward with a single securities regulator. The Minister of Finance appointed a panel of experts to look at the possible creation of a common securities regulator in Canada, headed by Tom Hockin, a former federal Conservative minister of state for finance and a former president of the Investment Funds Institute of Canada.

These are some of the issues that have been addressed both for those who are in favour and who are against a common regulator.

On the second motion by the Bloc Québécois on the issue of equalization, the Minister of Finance, in announcing budget 2007, infamously stated “the long, tiring, unproductive era of bickering between the provincial and federal governments is over”. That was a very short-lived statement, as we all know. It certainly was never realized, except for the very brief second when the minister uttered those words.

In that budget, the Minister of Finance introduced amendments to the equalization formula, amendments the Conservatives believed would fix equalization for good.

Among other things, budget 2007 introduced a return to the measurement standard reflecting the fiscal capacity of all 10 provinces, a new approach to the treatment of natural resource revenues through a 50% exclusion of those revenues from the calculation of equalization payments and, finally, a fiscal capacity cap to ensure that equalization payments did not unfairly bring a receiving province's overall fiscal capacity to a level higher than that of any non-receiving provinces—

[The Acting Speaker, Conservative, Barry Devolin]

It being 6:15 p.m., it is my duty to interrupt the proceedings and put forthwith every question necessary to dispose of the business of supply.

The question is on the motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

No.

[The Acting Speaker, Conservative, Barry Devolin]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Acting Speaker, Conservative, Barry Devolin]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Acting Speaker, Conservative, Barry Devolin]

In my opinion the nays have it.

And five or more members having risen:

Call in the members.

(The House divided on the motion, which was negatived on the following division:)

Vote #12

Business of Supply

[The Speaker, Liberal, Peter Milliken]

I declare the motion lost.

A motion to adjourn the House under Standing Order 38 deemed to have been moved.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

Mr. Speaker, we are having this adjournment debate this evening because on January 29, 2009, I asked the Minister of Canadian Heritage and Official Languages a question and his response was not just unsatisfactory; it was very disappointing.

The Conservative budget does not meet the needs of those in the cultural community, yet culture accounts for over 7% of the GDP. Even though artists have been able to demonstrate their past cost-effectiveness, programs to promote culture abroad have not been re-established, to the bitter disappointment of the arts community. Not only are they disappointed, but they are extremely worried about their future at this time.

In the performing arts alone, as a result of the Conservative government's cuts, we can expect 2,000 to be laid off or lose their jobs in a sector that is normally very successful with just a little help from the government. Thousands of tours will be cancelled and organizations will be forced to close.

In January, I asked the Minister of Canadian Heritage and Official Languages how he can explain the fact that this budget contains nothing for the promotion of culture abroad.

Nor is there anything to help artists, not one red cent in this budget that will go as direct help to creators, not one cent more for the Canada Council for the Arts.

We were all a bit surprised a few days ago when a spokesperson for the Conservative government told members of the media that the Conservatives “were not buddy-buddy with artists”.

A surprising statement, yes, but surprising mainly because of the frankness of the member for Charlesbourg—Haute-Saint-Charles in saying out loud what his colleagues were thinking quietly to themselves, with barely concealed disdain for our artists.

Yet the cultural industry in Quebec represents 314,000 jobs, 171,000 of those direct ones. In Montreal alone, the cultural industry in 2005 generated economic spinoffs of $1.4 billion, and was responsible for a growth rate of 4.7%. That is huge. The culture of Quebec is a kind of formidable business card distributed by such greats as Robert Lepage, Cirque du Soleil or La La La Human Steps.

Last fall, the Stephen Harper government stirred up a storm in Quebec when it announced $45 million in cuts to programs for artists touring abroad. Then, just a few days ago, the Conservatives were again in the spotlight, pulling out of their hat a new program, the Canada prize, with some $25 million in funding for foreign artists who will be performing in Toronto.

Members have repeatedly questioned the Conservative government about its approach to the cultural sector. We have learned that it made unjustified cuts to the touring program. Then the government announced $25 million in funding for a program known as the Canada Prizes, which nobody seems to know anything about. The government tried to distance itself from the project once it realized that it was a boondoggle.

The Conservatives are attacking artists, art and culture for purely ideological reasons. They will regret it because Quebeckers feel that culture is the very soul of our nation.

That is reason enough for Quebec to take control of its own cultural development. It is more important than ever before for the federal government to transfer all culture-related responsibilities and funding to the Government of Quebec. This is critical to our economic survival and to our survival as a people.

[The Acting Speaker, Conservative, Barry Devolin]

Order, please. I want to take a moment to remind members that when they are speaking in the House, they are not to refer to other members by their names, but rather by their titles. The hon. Parliamentary Secretary to the Minister of Canadian Heritage.

[Dean Del Mastro, Conservative, Parliamentary Secretary to the Minister of Canadian Heritage]

Mr. Speaker, the intervention by the member is not unlike other interventions she has made. It was factually incorrect, as a matter of fact.

As you well know, Mr. Speaker, no government in history has supported arts and culture more than this government. In fact, no government in Canadian history has put more money into arts and culture than budget 2009, a budget that the very member who is making the intervention is voting against, which I find remarkable.

She talked specifically about the promotion of culture abroad, which she has mentioned many times. As you know, Mr. Speaker, because I know you follow these things very closely, we have provided over $22 million in ongoing support to culture abroad. This is delivered through agencies such as the Canada Council for the Arts, Telefilm Canada, the Association for the Export of Canadian Books, FACTOR, Musicaction and the National Film Board of Canada.

Just this past October, at the Sommet de la Francophonie, the Prime Minister announced that we would invest an additional $25 million in TV5 over the next five years. What will it use the money for? The hon. member might be inclined to research this because it has indicated that it will facilitate support for TV5MONDE and TV5 Quebec Canada to increase their Canadian and francophone content, modernize and expand their distribution through high definition television, modern media, Internet and video on demand, which will allow francophones in Canada and around the world to have increased access to the network. That allows promotion abroad.

I am really proud of this government's record with respect to heritage and the amount of support we are providing for artists. The member should either research the facts or stop misinterpreting the facts.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

Mr. Speaker, the member said that he is proud of what his government has done for heritage, but I do not see how he can be proud when every artist in Quebec and Canada is in desperate straits. They are begging the government to help them carry on touring internationally.

It is true that the current government has some funding programs to help certain segments of the cultural sector travel abroad. However, there is a gaping hole when it comes to theatre, music and especially dance companies. They no longer have access to any funding programs to help them tour internationally. That is not right. It is just not right for the government to cut $45 million from those programs, then turn around and give $25 million to the Canada Prizes for the Arts and Creativity, a boondoggle meant to bring artists here.

[Dean Del Mastro, Conservative, Peterborough, ON]

Mr. Speaker, the member sat in on the same briefings as I did. She keeps referring to the number of cuts and so forth but she was at the presentation on these numbers and knows that what she is saying is not accurate. However, she keeps spinning a misrepresentation to artists. It is unfortunate and it may well be part of the problem.

What we need to be telling artists is how much this government and Parliament has put behind them in support. We believe in what they do and in the vibrancy and value they provide to Canada, as well as the rich flavour they add to the world as a whole when it comes to their artistic contributions.

The reallocations conducted under our strategic review affect a very small amount, as I have said. In budget 2008-09, $2.31 billion have been allocated to the Canadian heritage portfolio.