Mr. Speaker, I am pleased to speak to the Bloc motion regarding a single regulator.
I would like to give a little background before stating the position of the Liberal Party on this motion.
In general, securities legislation in Canada and around the world has two main objectives: to protect investors and to ensure that financial markets are efficient, fair and transparent.
Regulatory differences between jurisdictions in relation to the disclosure and exchange of information between corporations and investors can distort the markets and increase the risks to investors. Both consequences are harmful to economic stability and competitiveness.
At present, Alberta, Manitoba and Quebec are opposed to the idea of a single regulatory agency. On the other hand, Ontario and British Columbia support it. In October 2007, the National Assembly of Quebec unanimously adopted a motion calling on the government to abandon its proposal for a national securities regulator.
One of the arguments made by the provinces is that oversight of securities is an area of provincial jurisdiction. The federal government should therefore not interfere. That is the idea behind the motion we are debating today.
I would now like to present some of the arguments against the current system. I will then present the counter-arguments, and after that I will explain the position of the Liberal Party.
First, in terms of arguments against, it is very expensive for corporations that want to attract capital to comply with all of the provinces’ regulations. This is particularly harmful to small businesses, it is thought, because the fixed costs of compliance are proportionately higher for them.
Second, time is an important factor in leveraging capital, and compliance with multiple provincial regulatory schemes delays the start of negotiations.
As well, investors in the less populous provinces may be denied access to certain investments because some companies trade only in the largest jurisdictions. Because of differences and disparities in the existing regulations, it is difficult to ensure they are implemented. More resources would have to be devoted to this.
However, there are also counter-arguments in support of the present “multijurisdictional” model, and the provinces make the following arguments.
This model allows innovative ideas to be developed that can be adapted and be more responsive to the specific features of regional markets. For example, Alberta’s specialty is the oil and gas sector, while British Columbia’s is mining, and so on. It also means that regulations can be more effectively administered, as the agencies with that authority acquire experience and knowledge in their regional markets. In addition, a common regulatory agency might impose compliance rules that were designed for larger multinational users and might exclude the small regional businesses, and thus cut them off from financing. And it would protect the regional securities infrastructure that the provinces and territories have created, with accountants, notaries, underwriters and other professionals. They are afraid they would lose that infrastructure to Toronto if there were a single securities regulator.
Opinions are divided across the country and there are pretty solid arguments on each side. Personally, my prior conviction has been more in favour of a single regulator than against one. However, in a sense, that is not the point today. I have come here to tell the House the Liberal position on this motion.
The motion says, in a very point blank way, that “securities regulation falls under the exclusive jurisdiction of Quebec and the provinces”. It takes that to be a fact. However, it is also a fact that there is considerable legal disagreement and uncertainty on this jurisdictional constitutional point. It is for precisely this reason that, some months ago, we said that a future Liberal government would refer this constitutional jurisdictional question to the Supreme Court of Canada.
We have already said, given the legal uncertainty as such, that the question of jurisdiction should be referred to the Supreme Court of Canada. Having said that fairly recently, we cannot possibly support a motion that states point blank that “securities regulations falls under the exclusive jurisdiction of Quebec and the provinces”. To vote yes for that would be to make a mockery of our earlier idea that this matter should be referred to the Supreme Court for its decision, given the legal uncertainty.
We cannot vote yes for the motion, which presumes jurisdiction to be with the provinces. However, neither can we vote no for the motion. To do so would be to make the presumption that jurisdiction rests with the federal government. Were we to make that presumption, it would not make sense for us to refer the matter to the Supreme Court of Canada when we become the government of the country.
Therefore, by an impeccably logical process, we are led to conclude that the only logical alternative for the Liberal Party is to abstain on the motion, and that is what we will do. Just to make sure that I am making this point clearly, I will repeat one more time the logic for abstention. The Liberal Party said some months ago that this matter, given the legal uncertainty, should be referred to the Supreme Court of Canada. Having said that, we cannot vote yes for a motion that implies with certainty, as a bold statement, that jurisdiction is exclusively provincial. Neither can we vote no because it would imply the opposite, that jurisdiction is exclusively federal. Therefore, we are driven to do the only logical and, I would argue, responsible thing, which is to abstain on the Bloc motion.