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.