House of Commons Hansard #17 of the 40th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was provinces.

Topics

Opposition motion—Securities commission and equalizationBusiness of SupplyGovernment Orders

3:45 p.m.

Bloc

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

Mr. Speaker, the member to my left should realize that the Bloc Québécois does not sit in Quebec City and is not picking a constitutional fight. A unanimous resolution of the National Assembly of Quebec states that oversight for securities falls within Quebec's jurisdiction. Therefore, the Bloc is not picking a constitutional fight. It is defending the interests of Quebeckers.

I would like him to answer honestly the member for Brome—Missisquoi, who asked about the per capita amounts given to other provinces. We know very well that Quebec is one of the provinces that receives the least—

Opposition motion—Securities commission and equalizationBusiness of SupplyGovernment Orders

3:50 p.m.

Conservative

The Deputy Speaker Conservative Andrew Scheer

I must allow a little time for the hon. member for Beauce to answer the question.

The hon. member for Beauce.

Opposition motion—Securities commission and equalizationBusiness of SupplyGovernment Orders

3:50 p.m.

Conservative

Maxime Bernier Conservative Beauce, QC

Mr. Speaker, I will be brief, because the facts are clear. The budget before us, on which we will soon have to vote in this House, will transfer huge sums of money to the Government of Quebec. I am very disappointed that the Bloc Québécois is voting against this budget. The Bloc Québécois was elected a long time ago to sit in this House, and its goal was to correct the fiscal imbalance. It took a Conservative government to correct that imbalance, despite the fact that the Bloc Québécois has been in Ottawa for 13 years.

Opposition motion—Securities commission and equalizationBusiness of SupplyGovernment Orders

3:50 p.m.

Conservative

Mike Wallace Conservative Burlington, ON

Mr. Speaker, I thank the member for Beauce for sharing his time with me.

I am pleased to have the opportunity to speak in opposition to today's motion and, more broadly, for the pressing need to improve the securities regulation in Canada.

While current global market turmoil has led many to call for strong regulation of financial markets, this issue is not new to our Conservative government. In fact, it had been a key priority for us from the start, as our government's mandate began in our initial election in 2006.

As outlined in budget 2006, we recognized that, and I will to quote from that budget. It states:

An important foundation for a strong economy is a regulatory regime for the securities market that ensures market integrity and investor protection....All jurisdictions recognize that Canada’s securities regulatory system must be improved to respond more rapidly and effectively to regulatory and market developments at home and abroad.

Since 2006, we have worked towards improving that system, most notably through the work of the expert panel on securities regulation. However, during that time, the global economy has dramatically changed. Market turmoil that began in 2007 in the United States, sparked by the havoc wrought by toxic subprime mortgages on their domestic housing market, has exploded into a synchronized global recession.

The global financial crisis has thrust the role of regulation and the importance of financial stability into the spotlight. Canada has learned from the experience of other countries that systematic risk can arise from all parts of the financial sector, not just the banking sector. Obviously that includes the capital markets. Yet one thing has not changed: Canada remains the only industrialized country without a national securities regulator.

From labour to business, from left to right, from small to large investors, we have heard the same refrain. This irregularity exclusive to Canada is now, more than ever, no longer acceptable.

Listen to the Small Investor Protection Association, which states, “We don't have a national system of protecting investors....we think it's important that all Canadians should have the same amount of protection. And that can only be done through a national organization”.

Listen to the recent Montreal Gazette editorial, which states, “It's absurd, in the era of unprecedented anxiety about all things financial, that 13 different agencies, one in each province and territory, regulate the trading of stocks and bonds and the like in Canada”.

Listen to the Canadian Bankers Association, which states, “We have been debating securities regulation in Canada for decades: enough is enough....the debate is over, it’s time to get this done”.

Listen to the National Union of Public and General Employees, which states, “Canada is the only member of the Group of Seven industrialized nations without a national securities watchdog. It has a dismal reputation at home and abroad in dealing with corporate crimes and wrongdoing”.

Listen to Michael Code, a securities professor at the University of Toronto, Faculty of Law, who has said, “If there was a time when the need for a national securities regulator cries out, it's now”.

Our Conservative government has listened to these voices and we are taking concrete action in response.

We are taking an important first step toward a new regulatory regime by introducing legislation based on recommendations of the aforementioned expert panel. That panel, chaired by the Hon. Tom Hockin, conducted an extensive and open consultation process, publicly seeking and inviting submissions. From that process, recommendations were developed on the best way forward to improve securities regulation in Canada. I encourage all to take the time to read this important report. It is reachable at expertpanel.ca.

There is good reason why we must urgently take action on this front. We all recognize that 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. Indeed, our financial system has been judged as the soundest in the world by the World Economic Forum. However, we have a capital markets regulatory system that can and must be improved.

This is why we plan to introduce a new securities act that will provide for greater investor voice in policy-making, better and more coordinated enforcement and the creation of an independent tribunal. Most important, the act would also give a financial stability mandate to the Canadian securities regulator.

As I stated earlier, financial stability is a key factor in setting up such a regulatory body. The proposed regulator will be integrated into Canada's financial stability framework, a framework that includes the Minister of Finance, the Bank of Canada, the Office of the Superintendent of Financial Institutions, the Canada Deposit Insurance Corporation and the Financial Consumer Agency of Canada.

Giving this new regulator a seat at this table will ensure that capital markets will be better represented in Canada's financial stability regime. The role of this framework was amply illustrated in 2008 with the introduction of the Canadian lenders assurance facility, which helps Canadian financial institutions secure access to term funding.

Shortly after the CLAF was created, the federal government agreed to extend its coverage to Caisse centrale Desjardins, a provincially regulated financial institution, after urgent requests by the government of Quebec. This shows the ability and promise of a national body to secure financial stability in a collective fashion that does not intrude on provincial rights.

In the words of Quebec's minister of finance, Monique Jérôme-Forget, it spoke to “the intangible benefits that can be realized when the governments work together with a common purpose to support the Canadian financial sector”.

Indeed, working together, we can build on the rudimentary steps toward an improved securities regulation through the passport system.

For a quick refresher, in 2004 provinces and territories, except for Ontario, admitting to the flaws of the current regime, agreed to create a passport-style system to regulate securities. While the passport system slightly narrowed the regulatory differences and streamlined security laws, and this was a first step, it was recognized that it did not go far enough or even fast enough.

With the passport system, we still have 13 regulators, with 13 sets of laws and 13 sets of fees. We still lack a national co-ordination of enforcement of activities.

In the words of the Canadian Bankers Association, the passport system is only a second best solution. The current fragmented regulatory system remains in place, entrenching a potentially confusing and inefficient enforcement mechanism.

Clearly the passport system is not where Canada needs to be in today's global economy. As we move forward on these next steps, we are confident that a majority of provinces and territories will join us as willing partners to explore this vital initiative.

I point out that this is just one of a series of steps that we are taking to strengthen Canada's financial system and we hope to continue the good work beyond our own borders. The global financial crisis has shown that regulation is a shared responsibility between the countries and we must continue to eliminate barriers for this common purpose.

I thank the House for the opportunity to speak to this item today as the member for Burlington. I have a tremendous number of financial services located within my riding. It is an important issue which has been brought to my attention by people who live in my riding and by the businesses in my riding. In fact, it was part of a discussion I had last week with the local chamber of commerce. It is looking for a common regulatory body. We are looking for a common securities commission, and I look forward to seeing that happen.

Opposition motion—Securities commission and equalizationBusiness of SupplyGovernment Orders

4 p.m.

Bloc

Meili Faille Bloc Vaudreuil—Soulanges, QC

Mr. Speaker, I would like to ask my colleague a question about his speech. First, perhaps he could explain the difference in treatment between Hydro-Québec and Hydro One and clarify that for us.

Opposition motion—Securities commission and equalizationBusiness of SupplyGovernment Orders

4 p.m.

Conservative

Mike Wallace Conservative Burlington, ON

Mr. Speaker, I am happy to entertain that question. I used to work for Ontario Hydro at one time. That was not what I was talking about today. That is another part of the motion.

In response to another speaker earlier, a member of the member's party indicated that the difference between the hydro organization in Quebec and the organization in Ontario is that at least one-third of the activity is different.

The Minister of Finance was clear with us at the finance committee that they are being treated differently because they have different functions. The member today on the opposite side said in the House that they are different by at least one-third. To me, one-third different is significant, and it made a difference in how they are treated in our system.

Opposition motion—Securities commission and equalizationBusiness of SupplyGovernment Orders

4 p.m.

Whitby—Oshawa Ontario

Conservative

Jim Flaherty ConservativeMinister of Finance

Mr. Speaker, I commend the hon. member for Burlington for his erudite and persuasive argument in support of a national securities regulator for Canada.

I wonder if the member has taken into consideration the fact that we are in a global fiscal crisis and that we have seen developments over the course of the past 18 months that have resulted in cries around the world for greater regulation of activities and products in the financial sector. I wonder whether the member for Burlington would agree that the events of the last 18 months, including the efforts of the G7 and the G20, further support the compelling need for a national securities regulator in Canada.

Opposition motion—Securities commission and equalizationBusiness of SupplyGovernment Orders

4 p.m.

Conservative

Mike Wallace Conservative Burlington, ON

Mr. Speaker, I thank the minister for the question. I absolutely agree. What we have heard coming out of the G20 and the G7 is that Canada is a role model in terms of its banking and financial systems. Where we are weak compared to other countries is in the regulatory system on our securities market. It could make a huge difference to average investors, whether they are in Quebec, Manitoba, Ontario, British Columbia or the territories.

We need those protections that a national securities commission would allow us. What the minister has put forward is that we are looking for partners to join us. We are not forcing it down anybody's throat, but I can say that the investors and corporations in Quebec will want to be part of this organization.

Opposition motion—Securities commission and equalizationBusiness of SupplyGovernment Orders

4 p.m.

Bloc

Thierry St-Cyr Bloc Jeanne-Le Ber, QC

Mr. Speaker, whether we hear from the Liberals or the Conservatives, there is always this same paternalism. What the member just said about how corporations in Quebec will be happy is not true. They are against this. In Quebec, everyone has come out against the Canadian securities commission. The 125 members of the National Assembly, the unions, management representatives, the banks, the caisses, everyone is against it. I have a great deal of respect for the people of Ontario, and the member from Ontario is doing his job well and defending his province. We are doing the same thing and defending Quebec. So it would appear that all those people in Quebec are wrong. Ottawa knows best, Ottawa knows what is good for Quebeckers and has just told us that this will be a good thing. In addition, we have to realize that the fact that membership in this securities commission will be optional is just smoke and mirrors. Clearly, once it is in place, the provincial bodies will wither and die. That is the whole idea.

Opposition motion—Securities commission and equalizationBusiness of SupplyGovernment Orders

4:05 p.m.

Conservative

Mike Wallace Conservative Burlington, ON

Mr. Speaker, I enjoyed spending some time with the member on the finance committee.

I have read the final report and recommendations from the expert panel on securities regulation. I would challenge the members across to look at the panel members who made up that panel, their expertise in the financial market and their expertise on how securities work around the world. Their recommendations clearly state that what is best for all Canadians--and let me emphasize that, all Canadians--is a national securities regulator.

Opposition motion—Securities commission and equalizationBusiness of SupplyGovernment Orders

4:05 p.m.

Bloc

Meili Faille Bloc Vaudreuil—Soulanges, QC

Mr. Speaker, I am pleased to speak today about this issue and to inform you that I will be sharing my time with the hon. member for Quebec. I would also like to share my views during these difficult economic times on two files that seriously affect Quebec.

Many of my colleagues have spoken and tried to do so very objectively. They expressed the views of various players on Quebec's economic scene. I did the same in this House a number of times over the past months when I was responsible for defending the securities file.

I would like to congratulate my colleague from Saint-Maurice—Champlain for his clarifications in the House and his work on the Standing Committee on Finance. It seems that the government is stubbornly pursuing its plans to implement a national securities commission and unilaterally amend the equalization formula. I am imploring the House to stand united and demand that the federal government renounce these two measures that were in the last budget.

The National Assembly is unanimously opposed to the proposed amendments to the equalization formula and to a Canada-wide securities regulator. Amending the equalization formula would mean a loss of $991 million for Quebec next year. By refusing to include revenues generated by Hydro-Québec’s transmission and distribution activities, as is the case for Hydro One, Quebec would receive approximately $250 million more in equalization. Securities fall under the jurisdiction of Quebec and the provinces. The National Assembly is unanimously opposed to the establishment of a common securities regulator. Establishing a common securities regulator would jeopardize the survival of trading activities in Montreal and would favour the concentration of financial markets in Toronto. The World Bank and the OECD reported that the current system works well and is both efficient and effective.

The Bloc Québécois and the people of Vaudreuil-Soulanges—I am speaking on their behalf today—agree with the Bloc Québécois motion and we are asking the government to renounce these measures that were in the last budget.

Quebec's demands are clear and precise. On the eve of the federal provincial meeting in January in preparation for the federal budget, the National Assembly unanimously passed a motion expressing Quebec's demands. I will not bother with all the paragraphs in the motion, but I would draw the House's attention to two points, two demands:

That [the National Assembly] demand that the federal government maintain the equalization programme that is currently in place;

and

That it reiterate its firm opposition to the Canada-wide securities commission project.

Here, in this House, the Bloc Québécois and all the Quebec MPs have a duty to represent the National Assembly. And with a unanimous motion like this, we can defend—to our respective parties—the position we intend to take on the vote that will be held this evening. I implore Quebec MPs not to turn their backs on their colleagues from Quebec in the National Assembly and to support the Bloc's motion.

Indeed, as I explained earlier, the whole matter of the securities commission is Quebec's, constitutionally. It belongs to the provinces and to the Government of Quebec. The Conservative government, and the current finance minister in particular, seem obsessed with denying Quebec important rights to manage its finances and with moving those rights to Toronto for the country as a whole.

The consensus in Quebec is real, and no one wants to give up any authority at all in this area. Earlier on, the member for Mississauga South expressed confusion over the relevance of this debate today. And there is another reason the Bloc is drawing this matter to the attention of the House. A clear message must be sent to the government that this is unacceptable.

Why are we paying such attention to this question? Because the whole issue of securities is vital to the economy. In our current, more difficult economic situation, this issue is vitally important, and the provinces are entitled to take offence at the attitude of the federal government in this file.

The public has to know that the position of the Bloc is, I repeat, the same position adopted unanimously by the Quebec National Assembly. We speak with one voice at the moment where Quebec is concerned. This evening, we will likely see a common front against Quebec on this. I implore members to do their job and to consult the securities commissions in their respective provinces—except members from Ontario—and to report to this House what they think about this single securities commission.

Today, it could not be put more clearly. We have a motion, passed unanimously by all parties in the National Assembly and, here, an offensive by the Bloc calling on this government to abandon these two budget measures.

Quebec has the authority in this area and wants to keep it. It wants to maintain this power in the economic sector. The desire of the provinces in this matter must be respected.

Earlier today, the member for Saint-Léonard—Saint-Michel expressed concern about people swindling other people. We are referring to those who commit economic crimes and the thinking behind that, namely that these individuals tend to get off easy. His case for a securities regulator included references to such situations. He was concerned about people slipping through the cracks. I would like to respond to that. A number of experts and securities commission presidents are of the opinion that the federal government should focus on its own areas of responsibility, such as the Criminal Code, for instance, specifically to address economic fraud. I think the member was probably alluding to the widely publicized case of Vincent Lacroix. While Mr. Lacroix was found guilty under the Act respecting the Autorité des marchés financiers, additional charges might be laid against him by the RCMP under the Criminal Code. There are loopholes, and the legislation is not strong enough. In that regard, the federal government and the members of this House could do more to precisely strengthen that aspect.

Regarding Quebec, I would like to make another point about the Autorité des marchés financiers concerning operations monitoring and the types of operations. It reflects a perhaps different, made in Quebec model. This model is characterized by Quebec social values which pervade the general approach to public finance management in Quebec. We are talking about such things as the implementation of protection and compensation programs for consumers of financial products and services. Compensation funds are set up by law. The originality of the Quebec model has to be noted. We do not want to do without this ability to innovate in such an important sector.

Unfortunately, the budget confirms the government's intention to put in place a single securities commission. We, in Quebec, want to have an exciting economic future to look to.

Opposition motion—Securities commission and equalizationBusiness of SupplyGovernment Orders

4:15 p.m.

Conservative

Steven Blaney Conservative Lévis—Bellechasse, QC

Mr. Speaker, I was listening to my colleague’s speech but it seems to me that she is more the one who is turning her back on Quebeckers by presenting the two parts of this motion today and voting against the budget. I find it hard to understand how she can oppose a budget that increases equalization payments to Quebec by $8.3 billion. That is a 70% increase. It is unprecedented.

Since the Conservatives have been on this side of the House and put an end to the Liberal cuts that were closing beds and hospitals in my riding of Lévis—Bellechasse, equalization has increased like never before. So my colleague is now opposed to that. Is she not turning her back on the Quebeckers she represents when it comes to equalization?

I would also like to know what she is doing for businesses in Quebec. There are a lot of them in my riding and I am sure there are a lot in hers too. These businesses need to be able to access financial markets, especially in times of economic uncertainty. The Organization for Economic Cooperation and Development tells us that it is hard for Canada to be as efficient as possible and there is a danger that companies will decide to issue securities in other countries because of the inherent inefficiencies in the various commissions’ limited enforcement powers.

Whose interests is my colleague serving? Are there interests here that I cannot quite make out? Who is going to serve the interests of Quebec businesses? Would she not prefer to get on board and support a budget that is good for businesses that want to be able to access financial markets?

Opposition motion—Securities commission and equalizationBusiness of SupplyGovernment Orders

4:15 p.m.

Bloc

Meili Faille Bloc Vaudreuil—Soulanges, QC

Mr. Speaker, the hon. member just says this out of ideological stubbornness. If he were out in the field meeting businesses in his riding, he would know that what is currently proposed is nowhere close to adequate. If he were listening to his colleagues in the Quebec National Assembly, he would arrive at the same conclusion.

The Bloc Québécois is not turning its back on Quebeckers here. In fact, it is expressing at the top of its lungs what is being said in Quebec and what is happening in the field. Our priorities may differ from time to time. In this case, though, we have to defend the interests of Quebec, and that is what we are doing.

Opposition motion—Securities commission and equalizationBusiness of SupplyGovernment Orders

4:15 p.m.

Bloc

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

Mr. Speaker, I want to congratulate my colleague on her fine speech. She referred to a letter that the Quebec finance minister sent to the Finance Minister of Canada. In it, Ms. Jérôme-Forget reiterated the Quebec National Assembly’s unanimous opposition to the federal government’s plans to make unilateral changes to equalization and establish a single securities commission. In regard to equalization in particular, she referred to an obvious lack of transparency on the part of the federal government in a process that no one saw coming.

I wonder if my colleague could make a few comments on this letter.

Opposition motion—Securities commission and equalizationBusiness of SupplyGovernment Orders

4:20 p.m.

Bloc

Meili Faille Bloc Vaudreuil—Soulanges, QC

Mr. Speaker, I thank my hon. colleague for his question. He probably noticed that I did not have enough time to fully express my indignation over the equalization formula. It is completely unacceptable that the government waited until the middle of the holiday period, while no one was here and everyone was in their ridings, to publish regulations in the Canada Gazette changing how it treats Hydro One, and depriving Quebec of millions of dollars.

As for Ms. Jérôme-Forget's letter, I would like to be able to read it in full in this House. It describes what the Bloc Québécois has been expressing all day, that is, the indignation of all members from Quebec, who represent the Quebec people as a whole, regardless of their party affiliation, indignation caused by what the federal government is doing in the securities and equalization files.

For one thing, I would like the minister to explain why it was necessary for Ms. Jérôme-Forget to correct the facts. She says in her letter that what we hear from federal government officials, the minister himself and the people around him, is incorrect. For instance, we heard the argument concerning the cost of equalization and were told that it would increase by 15% each year, an untenable rate. The Quebec minister says this is an exaggeration.

Opposition motion—Securities commission and equalizationBusiness of SupplyGovernment Orders

4:20 p.m.

Bloc

Christiane Gagnon Bloc Québec, QC

Mr. Speaker, we are having a debate today and it is an opposition day sponsored by the Bloc Québécois. In this debate, we are raising two questions. We call on this government to renounce two measures contained in the budget. We could address other measures, we think there is a consensus on these two in Quebec.

It was mentioned earlier that there had been a consensus at the National Assembly, a consensus on the banks, the financial market and a consensus on a Canadian securities commission, a consensus opposed to this commission's being aimed at the Ontario market.

How can the members from Quebec, the members of this government, be against such a broad consensus in the National Assembly of Quebec and other intervenors in the financial sector? I do not understand.

The second question, which also leads us to call for a renunciation of certain measures. concerns the equalization formula, and I will come back to it shortly.

I would first like to address the securities question. We all know that the provinces have jurisdiction over securities because of the authority given them over property and civil rights by subsection 92.13 of the Constitution Act of 1867.

The government is on the wrong track with this national securities commission, a single regulatory body. There would be a regulatory monopoly. The government has handed out $150 million to set up a group of experts to harmonize certain recommendations appearing in a report. Really, $150 million.

This is a flagrant violation of Quebec's jurisdictions. This is nothing new, since other governments besides the current one have tried to take this route. There was the Liberal government as well. Year after year, we have managed to counter the desire of the governments sitting in this Parliament to establish a single securities commission.

I wonder why the European community finds establishing a passport system a good way of controlling things. Why the passport? Because it allows companies registering in one the of the participating provinces to do business with everyone in all the provinces, except—and this is weird—Ontario. It is off on its own and is not interested in the proposed harmonization, an approach praised by the European community. To create a single securities commission would be to create a regulatory monopoly. This is why the Bloc is opposed to the idea, and we said so concerning the last budget.

We believe that this situation is dangerous given the very high concentration of regulated industries which would cause advantages to be lost both in Canada and, in this case, in Quebec. The prevailing regulation encourages competition. To go in this direction makes no reference to this consensus of the National Assembly of Quebec, which passed a motion urging a step back from this proposal.

Why is Ontario going it alone? And they want to establish a securities commission in the province that is presently acting on its own and does not want to be bound by the existing body of regulations? Even the Autorité des marchés financiers says that it is the last bastion before the disappearance of stock exchange activities. So there are a lot of repercussions for Quebec, and that is why the Bloc Québécois is against this direction, out of respect for Quebec’s jurisdiction in securities.

As for the second aspect of today’s question, once again, we do not understand how the hon. members who come from Quebec and sit on the government side can tell us that equalization respects the will of the representatives of Quebec or the population, and that it represents more money.

During the election campaign, we did not understand the Quebec Liberals who were saying we would lose about $75 million due to the way the calculation of equalization was being set up.

On November 3, a federal-provincial meeting of finance ministers was held, which was attended by the minister from the Conservative government. They said it would be barely $75 million. That is money, all the same. After the election of the Liberal Party in Quebec, people woke up and realized it would be a loss of a billion dollars. The Parti Québécois had it right during the election campaign. All of sudden, the Liberal Party realized that it meant a net loss of one billion dollars for the coffers of the Government of Quebec. We are told there is a lot of money for Quebec, but there would be even more money for Quebec if the agreement had been respected, for example. The Prime Minister had just told the Premier of Quebec that there would be an open consultation with the Government of Quebec. I have the letter in my hands, and I could quote a large part of it concerning the desire to respect the fields of jurisdiction of the provinces and of Quebec. They have talked to us about the open federalism of this Conservative government. But the more we proceed, the more we see how the Conservative government flouts the will of Quebec.

The way the Conservative government has gone about calculating equalization is simply unthinkable.

The other aspect of the issue—as we have said earlier—is the way in which revenues generated by Hydro One and Hydro-Québec are handled. If revenue were calculated the same way for Quebec, we would have $250 million more. So how can the Government of Quebec still trust this government?

A number of letters have been written by the Quebec finance minister—no sovereignist she—which reached the same conclusions on this as the Parti Québécois has on this issue.

This is why the Bloc cannot vote in favour of this budget, because Quebec is the loser. There are other aspects of the matter that we have not discussed either. For example, the job losses in the manufacturing and forestry sectors. There is just a few million for Quebec, compared to $2.7 billion for the automotive industry. That is a real double standard.

How can it be that the people who have become MPs and members of Cabinet in this Conservative government are thumbing their noses at what Quebec wants in order to progress, to become more productive and more competitive? And then, how is it possible to become more competitive on the stock market and the financial market, with the creation of this securities commission? Do you know what we are being told? They will leave the provinces free to join this single securities commission. But you know very well what will happen. When there is a choice, they will abandon Quebec and join with the securities commission in Ontario.

I cannot understand how Quebec MPs, members sitting here in this Parliament, can forget Quebec when they arrive here in this Canadian Parliament. That has happened all too often. The province is no longer close to their hearts.

They can try to sell us on anything all day today, but we have the documents here to tell us not to go in that direction. If today the Bloc is standing tall, is it because we have promised to speak out whenever things are heading against the interests of Quebec, and that is what we are doing today in bringing a motion like this one to the House.

Opposition motion—Securities commission and equalizationBusiness of SupplyGovernment Orders

4:30 p.m.

Conservative

Steven Blaney Conservative Lévis—Bellechasse, QC

Mr. Speaker, I come from Lévis, where the largest Quebec and Canadian cooperative, the Mouvement Desjardins, has its headquarters. This financial institution says that the 2009 budget presented by our government is the best prescription for preparing the Quebec economy to deal with the economic crisis.

As a Conservative member, I am pleased to support the budget. On the other side of the House, the Bloc Québécois members remain seated with their arms crossed. They need members who will work for Quebec. We have heard some pretty amazing things this afternoon. What surprises me is that equalization became problematic while the Bloc Québécois was in Ottawa.

The Liberals put a stranglehold on Quebec's finances and the Conservative government put an end to the fiscal imbalance. Quebec will receive $8.3 billion. Equalization payments have never been this high. Why? Because all Conservative colleagues from across the country are working together to ensure that Quebec flourishes within Canada. Our goal is to have a strong Quebec within a united Canada.

I will ask my colleague this question: when will she stand up for Quebec by supporting the Conservative budget?

Opposition motion—Securities commission and equalizationBusiness of SupplyGovernment Orders

4:30 p.m.

Bloc

Christiane Gagnon Bloc Québec, QC

Mr. Speaker, I will accept that challenge right now. I will stand up for Quebec today. I have come here bearing the consensus of the National Assembly of Quebec. I have come here bearing the consensus of Quebec's financial stakeholders. I have brought with me this consensus.

I enjoy seeing the member for Lévis—Bellechasse so animated. However, I believe that he is all alone on his skating rink. He is suggesting to members from outside Quebec that the creation of the securities commission and the equalization formula are part of Quebec's vision. The member wants to convince other members from outside Quebec in this House that he represents the consensus of the National Assembly of Quebec. Then the member for Lévis—Bellechasse tells me that I do not stand up for Quebec.

Opposition motion—Securities commission and equalizationBusiness of SupplyGovernment Orders

4:30 p.m.

Bloc

Thierry St-Cyr Bloc Jeanne-Le Ber, QC

Mr. Speaker, I welcome the opportunity to put to my hon. colleague a question which I ask time and time again.

The exchange that just took place shows that Quebeckers can never get what they want out of the Canadian federal system, under either the Conservatives or the Liberals.

Today, we have Conservative members looking forward to vote against the consensuses in Quebec. The member for Lévis—Bellechasse passionately stated that Ottawa knows best. It knows was is good for the 125 MNAs in Quebec who passed two unanimous motions, both of which we support and are putting before this House today. All 125 members were wrong. Ottawa knows what is right for the people of Quebec.

I have a simple question for my hon. colleague. Where does this leave Quebeckers? With the federal system never meeting their needs, under either the Conservatives or the Liberals, what can they do to take charge and make their own decisions without having to seek permission from Ottawa?

Opposition motion—Securities commission and equalizationBusiness of SupplyGovernment Orders

4:35 p.m.

Bloc

Christiane Gagnon Bloc Québec, QC

Mr. Speaker, I thank the hon. member for his question.

We are bearing the consensus. The Bloc Québécois is often blamed for thinking this way or that way, for preventing this, that or the other from happening, for opposing the budget. In a nutshell, the Bloc is often said to be the problem.

Let us take a look at the two issues under consideration. We are representing the consensus at large achieved at the Quebec National Assembly on these two issues. I cannot understand that the member for Lévis—Bellechasse, an elected member from Quebec, does not get the Quebec consensus.

Members from Quebec have a responsibility when they come to Ottawa. They have to reflect what the reality is in Quebec. At present, these two issues make no sense. Only by achieving sovereignty could Quebec see things turn around. Quebec sends $50 billion in tax revenue to the federal government. Equalization is calculated based on revenues received by the federal government, which are then redistributed among the provinces. It would take too long today to explain the method used to calculate equalization. Suffice it to say that it is as if we were getting a handout. No wonder people are exasperated with that system. We have to come and beg for money we already gave to the federal government.

Opposition motion—Securities commission and equalizationBusiness of SupplyGovernment Orders

4:35 p.m.

NDP

Judy Wasylycia-Leis NDP Winnipeg North, MB

Mr. Speaker, I am pleased to rise to speak to the motion introduced by the Bloc Québécois. I want to thank the members of that party for introducing this very important motion.

I can support this motion with a few reservations.

Opposition motion—Securities commission and equalizationBusiness of SupplyGovernment Orders

4:35 p.m.

Conservative

The Deputy Speaker Conservative Andrew Scheer

Order. I apologize to the hon. member for Winnipeg North. I should have done this before I recognized her to speak.

It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Saint-Bruno—Saint-Hubert, Culture; the hon. member for Dartmouth—Cole Harbour, Employment Insurance.

I apologize to the hon. member. We will continue on debate.

Opposition motion—Securities commission and equalizationBusiness of SupplyGovernment Orders

4:35 p.m.

NDP

Judy Wasylycia-Leis NDP Winnipeg North, MB

Mr. Speaker, as I was saying, I am pleased to have this opportunity. I thank the Bloc for introducing this motion and will give my support to the motion with some qualifications.

The House will know that we in the NDP oppose the Conservative government's budget with every means available to us. I am sure the Bloc has not changed its mind with respect to the egregious matters pertaining to the budget. Unfortunately, the Liberals have decided in fact to give carte blanche to the Conservatives. There has therefore been little opportunity in the House to, in effect, create change or bring about some responsible amendments to the Conservative plan of action.

Today the Bloc was good enough to bring to us two parts of that budget and both are important. I want to start with the second part which has not had as much attention today as it should and that is the question of what the government is doing and has done with respect to transfers to provinces and equalization.

Everyone will note the amendment says that we should denounce the federal government for unilaterally amending the equalization formula. It goes on to say that the Prime Minister had promised transfers to the provinces would be predictable and long-term, and should in fact be based on an equalization calculation previously agreed to. That is a reasonable proposal. That is precisely what all provinces had hoped for. I am sure all provinces stand with us today in condemning the federal government for its arbitrary, arrogant, unilateral abdication of its commitment to work in harmony with the provinces and to do something on the basis of informed consent.

Informed consent was absolutely missing from the budget when it came to equalization and transfer payments. I had raised in the House a matter of what appeared to be cutbacks to transfer payments for health care. It was not just a matter of appearances, it was a matter of fact.

The government, in terms of its configuration of the whole formula around equalization and transfer payments, arbitrarily decided to reduce transfer payments for health care to several provinces, including my own. Manitoba is to see a loss of $13 million as a result of the government's magical configuration of the numbers.

I raised it. The Conservative government, of course, refused to acknowledge what it had done and it took behind-the-scenes manoeuvring until something finally happened with respect to federal officials letting the provinces know that they would not see their numbers reduced for this fiscal year. Nobody in the government will admit that this ever happened. There has been no acknowledgement, no up-front disclosure. It was all done behind the scenes, both the cutbacks, in the first place, and, second, the embarrassing retreat on this issue. That is what it was.

In the health committee when the health minister was confronted with the question of when she informed the provinces that their money would be returned, she pretended she knew nothing about it. That is part of the problem we are dealing with.

Furthermore, when it comes to equalization and transfer payments, that is in an area where every province counts on responsible, reasoned actions on the part of the federal government to be able to provide the services that they need to meet the requirements of their health care systems.

That is fundamental. One cannot govern in this country without the knowledge that transfer payments will be available on a reliable basis and in the numbers that are required based on the demand and need. We are still struggling, trying to catch up from the days when the Liberals unilaterally cut $6 billion out of our health and social services systems, setting us back an entire decade or more. We are still trying to catch up from those days.

Let us hope that in this time of economic recession we do not repeat the mistakes of the past, that we do not allow any government in this country to cut back health care in order to respond to an economic recession. Let us make sure that the health care of Canadians comes first and it is at the top of all of our agendas.

I will go to the issue of equalization because that is specifically mentioned in the Bloc motion. I have to say that the Bloc is absolutely right. We had long deliberations at the finance committee around equalization. We had thorough meetings around the country. We acknowledged the work of the O'Brien commission, which made a series of recommendations, which the government of the day said it supported. The present Minister of Finance said when the new equalization program was introduced in budget 2007, that the budget “delivers a new equalization program that is fair to Canadians living in all provinces. It will be formula driven and principled”.

Why did that commitment of 2007 not follow through to the 2008 budget? Why did the government decide to ditch O'Brien, ditch that commitment to fairness, to advance notice, to making decisions based on a formula that is clearly objectively driven, not politically motivated?

We have seen the outrage in the House and the concerns from all parts of the country, especially in the province of Newfoundland. Interestingly, the leader of the Liberal Party gave Liberal members from Newfoundland the discretion to vote against the Conservative budget on that one instance, despite the fact that there are many issues of concern pertaining to equalization affecting many other provinces, and despite the fact that the Liberal Party stood with us in this House calling for a firm commitment to pay equity in this country. The Liberal Party decried the Conservative government's dismantling of pay equity and its death blows to equal pay for work of equal value and its targeted attack on the whole pursuit of equality for women. Has the Liberal leader given the women of his caucus, or any defenders of equality, the latitude to vote against the budget because of that unacceptable Neanderthal notion? Absolutely not.

On equalization, I want to say to the Bloc members that their motion is certainly in line with what has happened. We need to stand together and condemn the government and ask why it did not consult the provinces before announcing its intention to make significant changes to the equalization program.

How does the government explain its decision to weaken a major transfer program so soon after it was renewed on the basis of an expert panel's recommendations and after describing the changes as formula driven and principled? Why did the government not look at the O'Brien report and its recommendations for a consultation process for future changes to the equalization formula? Why has the federal government targeted the equalization program for reductions, particularly when the 2007 Conservative budget noted that the strengthening of the equalization program went hand in hand with changes to other major transfers?

There are many more questions, but I think I have made the case. The government unilaterally and arbitrarily ignored its own recommendations to follow the O'Brien commission to have a formula based equalization program so that provinces could be sure of the money that they would be receiving, know that it was based on objective factors and could count on their federal partner. The federal government let down the provinces and now we have to stand in the House and try to bring some sense to the federal Conservatives.

Let me put aside the issue of equalization. I think enough has been said on that for now. I would like to return to the question of securities regulation in this country.

The motion by the Bloc suggests that a national securities commission is wrong and that establishing such a commission would constitute an intolerable intrusion into Quebec's jurisdiction.

Let me say right at the outset, despite the fact that I support this motion and its intentions in terms of a better securities regulation system, I do not acknowledge or accept the words that this proposal is an intolerable intrusion into Quebec's jurisdiction. With some help from the Bloc, and perhaps at some point somewhere along the line the Liberals might become a constructive opposition and start offering some suggestions, we might be able to fashion a securities system that takes into account the uniqueness of the Quebec system and actually ensures that there is some harmony and coordination right across this country.

The reason I have no difficulty in supporting a Bloc motion that condemns a national securities regulator is that it is a scam; it is a scam on the part of the federal Conservatives to pretend that they are dealing with something while they are not getting at the nuts and bolts of the issues. They are not putting in place the laws, the regulations and the standards that actually would make a difference when it comes to criminal activity in the financial sector, when it comes to scam artists and fraud artists and people who take advantage of others in their most vulnerable times.

Having a national securities commission will not fix anything if the government is not prepared to say that we need a set of recommendations, a wide-ranging piece of legislation, standards and regulations that will a hold the corporate sector in this country accountable. That is what the New Democrats have proposed, a corporate accountability act for Canada, something that does not simply stop at national coordination of different regulators, but puts in place those elements that are vital to protecting people when they are most vulnerable and when they are being preyed upon by hucksters, fraudsters, con artists, and so on.

We have had this debate for many years. For ages we have been crying for the government to take action when it comes to securities regulation. The Liberals created a vacuum. They would not address the matter. The Conservatives for many months ignored this issue, but suddenly, at a time of their own political crisis, they decided to bring in an item to try to box in the opposition with no kind of consultation with Parliament. The Conservatives stand on a soapbox and act as though they were the protectors of Canadians at this time of financial crisis. It is time to call a spade a spade and to point out exactly how empty that promise is and how lacking it is in terms of real meat and potatoes for helping Canadians. It is time to demand from the government the kind of package that Canadians have been asking for, for many years.

What we have is a vacuum that has not been filled by either the Liberals or the Conservatives, so the provinces stepped in. The provinces started developing the passport system. They have had years to develop that system without any hint of involvement by the federal government. Suddenly, the federal government steps in and says that all that work has been for nothing. It wants to put that work aside, disband all of the provincial passport regulators and put in place a national securities regulator. The government wants to run the shop. It says that it will do what is best for Canadians and never mind what has been done before. Does that make sense? Absolutely not.

It would have made far more sense for the government to say to Parliament, “We do have a problem with securities and regulation in this country. We do have a problem with people being taken advantage of. We want to develop a plan and we want to do it with you”. It would have made sense to send the matter to the finance committee and ask it to develop some legislation, after consulting with Canadians, and bring forward something with real meaning and real teeth.

Why not have something like the Sarbanes-Oxley legislation in the United States? Why not have something wide ranging and broad sweeping that would actually deal with the problems at hand instead of another band-aid on a situation where people are hurting each and every day?

This is an issue of great importance. Every day there are people who are feeling the effects of a system that is not being regulated. They feel abandoned and left alone to sort out the mess that has been created by investors who take advantage of them and fraud artists who decide they can get away with something because the federal government is not watching.

What is the securities regulator going to do? How is it that the biggest Ponzi scheme in the world with Madoff in the United States happened under a system that has a very strong, supposedly, national securities regulator? Why? It did not take seriously the mounting evidence. All kinds of conflict of interest had not been guarded against in the first place. People within the system were taking advantage of others outside the system. It was a hornet's nest and no one would jump in and show the leadership that was necessary.

Having a regulator is not going to do that. Does anybody here think that the Conservatives' appointing a national regulator because someone from the investment community recommended it is going to make a difference? What about the expression of the pot calling the kettle black? Give me a break. Is it not time that the government actually did something significant on this front?

Many people have proposed alternatives. The NDP proposed the corporate accountability act. We suggested that there be a number of issues as part of that. In fact, we put forward ideas that included a requirement of having independent auditors appointed, having board members appointed who had no conflict of interest, having whistleblower protection for people in the industries where they noticed there were problems and wanted to let someone know, to ensure that there were some actual checks on CEOs and their excessive salary and benefit packages, to ensure that there was some mechanism in place to prevent that kind of excessive abuse by executives of large companies who end up finding a way to take advantage of individual clients and customers.

That is what we need. We need something with teeth, something with meaning, some solid piece of legislation that would actually make a difference.

We have dealt with many organizations on this matter. This is not something from the NDP. Considerable advice has come from the likes of Stan Buell who is with the Small Investor Protection Association. Considerable advice has come from Democracy Watch, which has provided us with all kinds of recommendations for a corporate accountability act, and from individuals who have a lot of expertise to offer. I think about Dianne Urquhart who has been very active on this front and worked with us on the income trusts file. I know that the Liberals are still trying to reverse the tides on that issue and are not prepared to accept the fact that income trusts have created a serious problem in our society today.

Let me reference a couple of the people who have spoken so eloquently about it and what needs to be done. I want to read a quote from an article by Alex Hutchinson in “The Bottom Line”. It is about Dianne Urquhart, who was working with the National Pensioners and Senior Citizens Federation, who said:

The retirement security of its members is being threatened by questionable investment products sold on the basis of misleading information targeted at seniors, and the current enforcement rules are failing to provide the needed protection.

The article goes on to talk about the need for a set of rules that will actually deal with some of those problems, not just a national securities regulator. It talks about the need for actual provisions that are enforceable by the government on the investment, banking and financial world of this country. “It is time to get tougher on white collar crime”, Dianne Urquhart and others have said.

Let me also mention the work of Al Rosen, who has been a very articulate spokesperson on this front. In an article entitled “Do the Math”, he wrote the following, and it goes back to 2006, but it is still relevant today:

A former chief accountant of the U.S. Securities and Exchange Commission recently told Forbes magazine that the discredited American Stock Exchange has become the new “version of the Vancouver Stock Exchange”.

My apologies to any members of Parliament from Vancouver.

Even though the VSE was cleaned up years ago, the stench lingers strongly south of the border. Nortel, Bre-X and a growing number of income trust debacles have only added to Canada's reputation for failing investors.

I might add that it was our former governor of the Bank of Canada, David Dodge, who described Canada in terms of the wild west.

My time is almost up, so let me conclude by saying that I support this motion because it does not address what is essential and we call on the government to put in place a meaningful package that gets at white collar crime.

Opposition motion—Securities commission and equalizationBusiness of SupplyGovernment Orders

4:55 p.m.

Saint Boniface Manitoba

Conservative

Shelly Glover ConservativeParliamentary Secretary for Official Languages

Mr. Speaker, I thank the member opposite for her eloquent speech but I believe she is a little confused about a few things that were mentioned.

I come from the same province of Manitoba and I am very well aware of what has been done with regard to equalization, transfer payments, et cetera. I just want to address the comments made about the health care transfers.

I would, with respect, direct the member to look at our budget and perhaps consult with the Manitoba government. In Part 9 of the bill, she will realize that there is no issue that exists anymore. The bill states that Manitoba is set to receive $468 million in transfer payments. I would suggest, and I believe the member opposite would be in agreement, that this is the highest level of transfer payments ever seen in my home province prior to this government being in power. We are doing more for the province of Manitoba than any other previous government.

This is what our Manitoba premier had to say about this:

Everybody understands that what happened in '95 is the deficit was moved from the federal government to the provinces.... We still have potholes in our country from what happened....

The Premier of Manitoba does indicate this because he knows that the Conservative government is protecting transfer support to provinces. I would suggest that the health transfers, as we have stated earlier, will continue to grow by 6% and social transfers will continue to grow by 3%.

I want the member opposite to acknowledge, which she has indicated that she believes, that national securities regulation is a worthwhile goal. I would like to ensure that she does not confuse us further by taking a position one day and another--

Opposition motion—Securities commission and equalizationBusiness of SupplyGovernment Orders

5 p.m.

Conservative

The Deputy Speaker Conservative Andrew Scheer

The hon. member for Winnipeg North.