Excuse me.
The Canadian Constitution does not say anything specific about such issues as the regulation of securities. It would be imprudent, therefore, to make major changes to the system only to have them challenged before the courts and invalidated.
Voting for this motion means assuming exclusive provincial jurisdiction. Voting against it means assuming federal jurisdiction. The Liberal Party will not assume anything until the Supreme Court has spoken.
Securities legislation in Canada and throughout 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 investor risk—two very undesirable consequences from the standpoint of economic stability and competitiveness.
In general, the agencies that regulate securities oversee four important areas: capital leveraging through the sale of securities, such as private offerings and primary distributions; corporate transparency and the continual disclosure of relevant information to investors; enforcement of the securities regulations and prevention of deceptive or fraudulent behaviour; the qualifications of securities traders; and their good reputation and accreditation.
Alberta, Manitoba and Quebec are currently opposed to a single securities regulator. Ontario and British Columbia, on the other hand, are in favour. In October 2007, the Quebec National Assembly unanimously adopted a motion asking the government to drop its plans for a national securities regulation commission. One of the arguments made by the provinces is that securities are a provincial responsibility under section 92(13) of the Constitution on property and civil rights. The federal government should not get involved.
Under the current regulations, securities in Canada are subject to directives from more than 13 provincial and territorial authorities. This sows confusion and hampers investment in Canadian businesses.
Companies trying to attract capital under the current system find it very expensive to comply with all the provincial regulations. Small businesses are particularly hurt because the fixed costs of compliance are proportionately higher for them. Time is also an important factor in leveraging capital, and the need to comply with a number of provincial regulatory systems delays negotiations. Investors from less populous provinces may be denied particular investments because some companies trade only in the largest provinces. The differences and disparities in the current regulations make implementation difficult. More resources would have to be devoted to it.
In answer to the criticism, all the provinces and territories with the exception of Ontario formed the Canadian Securities Administrators, a forum that allows the various securities regulators to coordinate and harmonize the regulation system in Canada. The Canadian Securities Administrators have developed a number of initiatives, including a passport system allowing for a single wicket and the ability to participate in all the regional capital markets.
On March 17, 2008, the securities passport system introduced the next stage, as a result of which any prospectus approved in one province would be recognized in all the other provinces, except Ontario. Canadian Securities Administrators also introduced an electronic data system for analysis and research to make information available, and a simplified national registration system for securities traders. According to an Ipsos-Reid survey conducted in 2004, 75% of financial professionals who responded were in favour of a national regulatory agency. In 2006, the Crawford panel commissioned by the Government of Ontario to examine securities regulation recommended the adoption of a common securities regulator.
The government included the creation of a national regulatory agency in the Speech from the Throne of November 19, 2008. At the time, the Minister of Finance proposed an exemption for any provinces that were opposed to the plan, including Quebec.
Last January, the panel led by Mr. Hockin published a 100-page report that called for creation of a decentralized single securities regulator that would allow Canada to protect investors better and be better integrated with international markets.
However, despite some recognition of provincial jurisdiction in the promise to maintain a presence throughout the country, the ministers of finance of Alberta, Manitoba and Quebec immediately opposed the plan. They threatened to sue the federal government if they lost their regulatory authority in this field. British Columbia gave official approval to the proposal.
Our position is clear. Before proceeding with a single Canadian securities commission, we should refer this question to the Supreme Court to determine whether that is constitutionally possible. However, we cannot support this motion today without reservation. It is not certain that such an institution would not better serve the economic interests of investors. That will have to be determined if the Supreme Court decides that the Constitution does permit such a regulatory agency to be established.
I agree with my Bloc Québécois colleague that the Minister of Finance is not going about it in the right way to modernize security regulation and make it more efficient so that our markets are more attractive to investors and issuing corporations. But on what cultural grounds should the regulations for buying and selling shares and bonds be completely different in Quebec? There is no plot by the rest of Canada to deprive Quebec of these decision-making market centres. Indeed, all the evidence suggests that a new securities commission would properly have offices in Montreal to be on the ground, monitoring the actions of the various brokers under its control.
I am not here to support the government’s decision, but simply to say that the government has failed to accept its responsibility to refer this question to the Supreme Court.