Madam Speaker, on behalf of the New Democratic Party, I am pleased to rise here once again in support of the Bloc Québécois motion on the securities regulatory system.
I will be giving much of my speech and making most of my comments in English, which is unusual for me, because it seems to me that for many people in the rest of Canada, it is much easier to follow in English.
It is important for people to understand that this is not a petty federal-provincial squabble. It is not that we are determined to maintain a system in opposition to the federal government. So I will begin in English and I would like to come back to what my hon. Liberal colleague just said, although I have to ask myself the question I often ask myself when the Liberals speak: will they walk the talk? Will their fine words lead to any concrete action?
The Liberal member of Parliament for Markham—Unionville, who just spoke, called the Conservatives' spending of large sums of public money on this issue imprudent and irresponsible. He is right. One does not spend public money on a crapshoot.
This issue is before the Quebec Court of Appeal right now, which is where the Quebec government referred it. The federal government is saying that it will be referring it to the Supreme Court of Canada. I heard the Conservative chairman of the finance committee, the member for Edmonton—Leduc, speak a little bit earlier and he said that the Supreme Court would rule in about a year.
That is not possible. It is absolutely impossible to formulate the reference to the Supreme Court, give appropriate time for the preparing of facta, hear the case and render a decision. It will not take place in a year. That is totally unrealistic. The money that is being spent, to quote the Liberals, imprudently and irresponsibly on this uniform securities regulator, risks being totally wasted.
That is on the pure public policy angle of it. Does it make any sense, therefore, to have this draft bill and to be spending that money? The Bloc motion simply calls for the government to withdraw the draft bill. That is good common sense to the extent that even the Conservatives are admitting, by their reference to the Supreme Court, that it is an open question whether the federal government has jurisdiction in this field. I will give arguments as to why I believe it does not. It follows, therefore, that the very least it should do is stop spending public money on it until that issue is clarified.
I have just said that the New Democratic Party of Canada will be backing this motion because we believe that the essence of the motion is to withdraw the draft bill before the House and we agree with that.
I have only one question for the Liberals. If they indeed feel that the government is spending taxpayer money imprudently and irresponsibly, will they vote for this motion to withdraw the draft bill? Unfortunately, I did not get the slightest indication from the Liberals as to what they will do at the end of the day on this important motion.
In any field of modern life and in a democracy such as ours that is a federation, there will be those who argue that the initial federative pact, in our case one that dates from 1867, contains lacunae. It cannot contemplate all of the realities of today. I will use that as my starting point to say that one of the big mistakes we make in our society is to assume that it is just normal to have a democracy that has been functioning. The American constitution has life, liberty and the pursuit of happiness, but to use the bromide from our own Constitution, we talk about peace, order and good government.
A lot of people make the mistake of believing that 150 years of peace, order and good government have come naturally, that they are a given and that they are to be expected. In fact, if we look at the world and the hundreds of countries in the world, we realize that 150 years of peace, order and good government cannot be taken for granted because it is quite rare on the world stage not to have gone through a revolution, a civil war, an external invasion or an attack of some kind.
That is the good fortune of Canada, but it is not only good fortune. It is because the structure we put in place in 1867 as we created our country took into account certain realities of the partners who were coming together. One of the realities was that the province of Quebec was the only province in the newly formed country that not only had French as its majority language but it also had the French civil law as the basis of its legal system. We often talk about a country that is both bilingual and bicultural, sometimes forgetting that we are also bijuridical.
Certain things that crossed boundaries were spelled out in the founding pact of the federation. At the time, we would talk about railways or telegraphs, but that expanded. The understanding of that federative pact led the Supreme Court to say that telecommunications, which is something that has to cover the whole country, would fall under those general headings. That is how the Constitution evolved and that is good common sense
However, since the beginning, property and civil rights understood, not in its 1960s connotation from the U.S. and in the battle for civil rights, but understood in its 1860s connotation of the civil law that covers the relations between people, the contracts and the property rights, that was left to the provinces.
There are those who would say that we need to follow the American model here, but it should be borne in mind that U.S. states individually guard just as jealously their jurisdiction as do Canadian provinces for very similar reasons. The United States, the most successful democracy in the history of the world, has shown that the institutions laid down, in its case it will be over 225 years that they have functioned effectively, it laid down its institutional rules.
Interestingly, in the United States, the state policing power, which is a key power, determines all aspects of licensure, enforcement and regulation for the professions, as does our federative pact with regard to education. For example, even though the dental, architectural and medical professions have their licensing exams in each of the provinces and could work together in their own associations across Canada, it is the individual provinces that deliver licences just as licensure is a subset of the state policing power in the United States.
Furthermore, in the U.S., criminal law is determined on a state-by-state basis. In Canada, we have always had a uniform Criminal Code for the whole country, a very fundamental difference between the two of us. Application of the criminal law can be either at the federal level or it can be provincially or municipally. The reflex we are dealing with on the Conservative side is a reflex born of a certain conceit that somehow, despite the federative pact, despite 150 years of peace, order and good government based on the original deal, that somehow when problems arise Ottawa just knows best.
Let us look at the facts. The OECD ranks regularly the relative performance of its member countries in important policy areas. In recent years it has rated competition laws and policies, the regulation of the banking industry and the quality of securities regulation and investor protection. Now let us look at banking regulation and the four countries that are covered.
In the U.S.A., U.K., Australia and Canada, banking is and always has been a federal jurisdiction. Canada is ranked eighth for its banking regulations. It is ranked, for example, behind Australia but it is ranked ahead of the U.K. and the U.S. On securities regulation, the OECD says that Canada's extant rules are the second best in the world. We are ranked ahead of the U.S., the U.K. and we are ranked well ahead of Australia. That is not the opinion of the Bloc Québécois, nor the opinion of the New Democratic Party. That is the Organization for Economic Co-operation and Development, an extraordinary group that has produced these objective studies.
How is it that we have come to the stage where the federal government keeps trying to take away jurisdiction that has been with the provinces for 150 years. What is the rationale behind it, other than the prejudice I just spoke about, this feeling that somehow Ottawa knows best? Again, let us look at the facts.
Recently there was a case of an alleged $100 million mortgage fraud in Alberta. The first thing we heard from the RCMP was that it did not have the resources to take on the case. That is an interesting admission. There is something called the Integrated market enforcement team, IMET. It has been a complete failure. That is not our opinion. That is the result of objective outside analysis.
One of the issues that is raised constantly, and I often hear the Parliamentary Secretary to the Minister of Finance use it as one of his touchstones, is the Earl Jones case. For people from outside Quebec who might not know the name immediately, Earl Jones was a criminal who is in jail now under the Criminal Code. He was not registered, certified or licensed anywhere. He was a criminal pure and simple, a fraud artist, a con man. In the proper sense, he took people's money based on the confidence that he established with them.
In other words, Earl Jones, a criminal, would have got around any regulatory scheme, be it federal or provincial, because he never registered anywhere. That has not stopped the Conservatives from trying to use that sad case as an illustration of the need for the federal government to invade an area of provincial jurisdiction.
I am an attorney and I have been dealing with corporate and commercial law for most of my career, so I will read an official court document from the Superior Court of Quebec. The case involves Virginia Nelles , one of the many people who were defrauded by Earl Jones and the Royal Bank of Canada. Now, as we all know, the regulation of Canadian banks is the exclusive purview of the federal government.
On November 7, 2001, in an official exhibit filed in court in this case, we learned that the Royal Bank specifically identified the irregular operation of the Earl Jones in trust account in an internal note written by someone from the Royal Bank summarizing the account. It reads as follows:
Mr. Jones returned my call. I offered him our ratelink essential package service because his fees are over $150 every month. He is using this account for business purposes as an In Trust account, however, I told him this is not a formal trust account and he could get himself in trouble because this is just a personal account in his name alone, the In Trust does not mean anything in this case.
What the regulatory authorities responsible for regulating Canadian banks did in the case of Earl Jones was nothing. What the Royal Bank did with regard to Earl Jones after that official note in its own file in November 2001 was nothing. What the people who were defrauded to the tune of $50 million by Earl Jones got as a result of that was nothing.
In the most literal sense, the federal government should mind its own business. It should start taking care of its areas of responsibility, something that it does not do. That is the fact of the matter.
I used to be the president of a large regulatory agency in Quebec. I was president for six years of the Office des professions du Québec . I met firsthand this reflex in Ottawa that somehow if they could get enough federal bureaucrats to look at any issue in the country somehow things would be better.
I remember coming to the office one day in Quebec City when I was president of the Office des professions du Québec, which is the large regulatory agency that is responsible for all of the regulated professions in the province, to find out that the gnomes in Tunney's Pasture, which is where the health department hides out, had decided that they would take over the regulation of pharmacies in the province of Quebec, much to our surprise because, as in every other province, pharmacies had always been the object of regulation by the provinces, a subset to education and the regulatory structure I referred to earlier for individual professions that come under the provinces.
Therefore, I called them in and met with them trying to understand what they were up to. They said that the rules for what requires a prescription vary from province to province, such as what can be behind the counter, what can be on the open shelf or what can be behind the counter with a signature, and that they found this to be a bit of problem so they decided they would take over this particular area of jurisdiction. That is interesting because, of course, health is also a provincial jurisdiction.
I remember sitting down with a wonderful man named David Skinner, who was with a group that was then called the Non-prescription Drug Manufacturers Association of Canada. I remember saying to him that this was not on.
The French word for jurisdiction is “compétence”, and it has the double meaning of jurisdiction and the ability to do something.
I went to one of the meetings of this group in Toronto, after I had met with Mr. Skinner. I said that it was not going to be allowed to invade an area of exclusive provincial jurisdiction just because some civil servants in Tunney's Pasture woke up one morning and decided that they were going to do that. Of course, we did not allow them to do it. We were able to block them. They had organized a big colloquium on this in Toronto. It was absurd to see lots of taxpayers' dollars being spent on this futile effort.
This did not stop the provinces from talking to each other. I remember that a network was established among the provinces for matters of professional regulation. We were working together to find the result, because it was their exclusive area of jurisdiction.
How did Canada wind up being evaluated by the OECD as having the second best regulatory structure in the world for securities regulation? It is because we put together a regime that allows the provinces to create a passport system, which has been producing results.
People in the rest of Canada might not know the name Norbourg. Norbourg was the name of a company owned by another fraud artist, named Vincent Lacroix. Lacroix was behind bars serving an eight-year sentence after prosecution by the Autorité des marchés financiers in Quebec, the financial markets regulatory authority in the province, before the first federal criminal prosecution even began.
The provinces have no lessons to receive from the federal government with regard to the regulation of financial markets. It has worked. The provinces have done their jobs. The federal government has not done its job. It is astounding to hear the federal government simply affirm that we should just allow the federal government to move into an area of exclusive provincial jurisdiction and that it is something that would be better for the country. It is wrong. We know that it is wrong.
Interestingly enough, some newspapers have tried to say that Mark Carney, the Governor of the Bank of Canada, is somehow in favour of the federal government moving into this sphere. I would like to read what Mark Carney says. I have had the pleasure of meeting him quite often. I have never heard Mark Carney come out four-square in favour of what the federal government is trying to do. I have heard him talk about the importance of having a regime that produces results. That is what we have.
Some journalists interpret Mr. Carney's remarks as an affirmation that he is in favour of the federal government imposing itself in this area. I have never heard Mr. Carney say any such thing. I defy them to prove to me, in Mr. Carney's own words, that he has ever given his support to this scheme. He has always talked about the need for a regime that works, and that is what we have.
The passport system works. There has never been a problem with it. As the old saying goes, “if it ain't broke, don't fix it”, but that is not going to stop the federal government from continuing to try to destabilize the confederation, to break the federative pact, and to go after the provinces.
If it were only the province of Quebec that was screaming bloody murder in this case, one could imagine how easy it would be for the Conservatives and the rest of Canada. However, two other major provinces are onside with Quebec. We are getting an interesting vibration from British Columbia, which seems to be about to say the same thing. The two other provinces that are saying the same thing are Manitoba and the Prime Minister's own home province of Alberta. We will see--
