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House of Commons Hansard #60 of the 40th Parliament, 3rd Session. (The original version is on Parliament's site.) The word of the day was financial.

Topics

The House resumed consideration of the motion.

Opposition Motion—Securities RegulationBusiness of SupplyGovernment Orders

3:15 p.m.

Bloc

Thierry St-Cyr Bloc Jeanne-Le Ber, QC

Mr. Speaker, I too rise to speak in support of the Bloc Québécois motion denouncing the efforts of the Conservative government, with the traditional complicity of the Liberals, to invade an area of Quebec jurisdiction by establishing a Canadian securities commission that would deprive Quebec of its powers over the area.

I would like to begin with a slight aside. People listening to us or reading our debates may find that the securities commission issue is quite boring and unimportant, given the difficulties we are currently facing. They may believe that it is not a major issue. I would like to tell them that, in my view, such is not the case, quite the contrary. I can concede that it may be boring, but that does not mean that it is not extremely important and pivotal.

Everything about this commission has very much to do with issues in the world of finance and the place where that financial sector is to be located. The question before us today is whether we agree that most, if not all, of the financial sector should be moved to Toronto. That is what this government really wants. Recently, we have seen that this government has no support. Its proposal has been almost universally condemned in Quebec. International organizations that have studied different systems show that the Canadian system works very well. The government has told us about cases of fraud. This is clearly nothing more than a red herring, a smokescreen. It has nothing to do with the matter. The reality is that they want to concentrate the financial system in Toronto, and that is extremely detrimental to Quebec.

We must look backwards. Before, during and after the Quiet Revolution, Quebeckers worked to free themselves from the English domination of their economy that existed at the time. Francophone Quebeckers, who made up the overwhelming majority of the population, saw that the control of the economy was entirely out of their hands. They had no control over it, and a tiny minority had its hands on all the levers. For decades, the Quebec people and their government have worked to change things.

I really liked Jacques Parizeau's explanation. He said that the Quebec government, when it was looking for funding, thought it was humiliating to have to beg for money from the Canadian financial community and be turned down. It then had to turn to the United States for capital.

Today, Quebec has strong, effective, useful and modern tools. It has come a long way. But we have noticed in recent years that it has started to slip. Montreal has already lost its stock exchange. The derivatives exchange is still there. Now, the federal government wants to pull out everything that is related to securities and move it to Toronto.

Obviously, that has significant consequences. The companies negotiating with the commission in Toronto will have to do so in English. We can see that this will be more complicated. Right now, if we want to meet with someone, we can take public transportation or our own vehicles and we can go to the Autorité des marchés financiers. We can have a meeting that way. But, if it is in Toronto, we would have to take the plane. It would be a bit more complicated. This process has started. Today, we have a federal government that wants to weaken Quebec's financial world.

Ultimately, we could understand them and see where their interests lie. What is more disappointing is seeing servile Quebeckers supporting them, sometimes even enthusiastically. We saw someone this morning laughing out loud at the comments of his ministers from the rest of Canada and taking pleasure in this weakening of Quebec.

We have a long list of people, and a coalition was even formed to denounce the government's plan. Here are some of the members of the coalition against the federal securities regulation plan: the Association de l’exploration minière du Québec, the Barreau du Québec, the Caisse de dépôt et placement du Québec, Cascades, the Board of Trade of Metropolitan Montreal, the Chambre de commerce de Québec, the Chambre des notaires du Québec, the Chambre de la sécurité financière, the Quebec Employers' Council. They are not bearded socialists, communists or separatists.

There are also the Fédération des Chambres de commerce du Québec, Fondaction, the QFL Solidarity Fund, the Groupe Jean Coutu, the Institut sur la gouvernance d’organisations privées et publiques, the Institut québécois de planification financière, Jacques Saint-Pierre, who is a professor at Université Laval, Jean La Couture, Corporate Director and Chair and Chief Executive Officer of the Regroupement des assureurs de personnes à charte du Québec, Jean-Marc Fortier, partner at Robinson Sheppard Shapiro, La Capitale Financial Group, Pierre Lortie, former chair of the Montreal Stock Exchange, Quebecor, the SSQ, the Société d’assurance-vie, the City of Montreal and the City of Quebec. We also heard from the media that Power Corporation and Desjardins are against this plan. All Quebec Inc. is.

In the National Assembly, the consensus is extremely strong. The four parties, from those on the far left to those on the far right, from the most federalist to the most sovereignist, all agree that this scheme is unacceptable. Unfortunately, 25 Quebeckers are defending the indefensible. There are only about 25 of them in Quebec, and they are in this House. These are the servile Quebeckers in the Conservative and Liberal Parties who are neither able nor willing, as we in the Bloc Québécois are, to work for consensus in Quebec, to defend it and to bring it to this House.

Some members of this House are not part of this fight. We were even criticized this morning for putting the securities commission on the agenda again. We were told that we were going to lose again. But we will not give up.

It is like the battle for nationhood; motions to recognize the Quebec nation were introduced in this House numerous times, and we finally won. We are going to continue to fight because we are neither servile nor submissive. We are here to defend the strong Quebec consensus, and we will continue to do so.

The government likes to think that we will fail again. If we do fail again, it will demonstrate the limits of federalism and the dead end that Quebeckers see it as. When we have an institution that is clearly in Quebec's jurisdiction, and we have to fight, not in order to make headway in Canada, but in order to not be pushed back, that shows that the best Canada can offer us is to not lose ground.

There are Quebec members of this Parliament who, servile federalists that they are, are going to defend the indefensible in the face of everything that is being done economically, politically and socially in Quebec. This shows that Quebec has no future in Canada and that, in the end, the solution for Quebeckers is to take the plunge, to decide on our collective future and to become a country, a sovereign Quebec.

Until that time, until such time as Quebeckers make that democratic choice, the Bloc Québécois is going to continue working passionately to defend the interests of Quebec, even if that annoys the Conservatives, and the Liberal members from Quebec.

Opposition Motion—Securities RegulationBusiness of SupplyGovernment Orders

3:25 p.m.

NDP

Jim Maloway NDP Elmwood—Transcona, MB

Mr. Speaker, there is trouble in the Conservative heartland of Alberta on this issue. None other than Ted Morton, Alberta's finance minister, wrote an article on June 1 in the Calgary Herald, in which he said:

This is not just about securities, but all financial services that have been regulated by the provinces under their Section 92 jurisdiction over “property and civil rights”-- including pensions, credit unions and insurance.

When it comes to diversification of the Alberta economy, financial services is one of the fastest growing sectors -- with the potential for much greater growth. The job-multiplying effect of having a provincial-based securities commission has been well documented by Quebec. As Canada and the rest of the world emerges from recession, Alberta will lead the way. If we let the Alberta Securities Commission get scooped up and transferred to Toronto, we can say goodbye to thousands of spin-off jobs in investment banking, law, accounting and financial analysts.

Why would Albertans want to do this, especially when it is not even necessary?

That was written by the finance minister of Alberta. Today when the parliamentary secretary was asked about Ted Morton, Alberta's finance minister, he pretended that it was just a minor difference of opinion, that he had just seen and spoken with him this past weekend and they were very close on the issue. All we have to do is read the article in the Calgary Herald to see that they are miles apart.

Opposition Motion—Securities RegulationBusiness of SupplyGovernment Orders

3:30 p.m.

Bloc

Thierry St-Cyr Bloc Jeanne-Le Ber, QC

Mr. Speaker, we see that Quebec is not alone in its concerns about this issue. The advantage of having a system where each province has its own regulatory authority, its own authority issuing passports so that people can move from one authority to another, is that the different authorities can take account of their particular reality.

One does not need two postdoctorates in finance or economics to understand that the economic structure of Alberta is not the same as that of Prince Edward Island or Quebec. That is why the current system is much more flexible and why many other provinces want to keep their system. For Quebec this is even more important. It is not just a matter of economic structure, but also of culture, language, and our capacity as a nation to have access to the economic levers that allow us to develop.

It is a little pathetic to see the government having to invoke the cases of Earl Jones or other fraud artists to justify its commission. It is as if I were to say that there are lots of murders in Canada and that proves that the Criminal Code should not be a federal responsibility. There is lots of speeding on our roads, but that is no reason to transfer the highway safety code to the federal government. Just because the system is not perfect and we are not able to catch every single case does not mean we must transfer the responsibility to someone else. We must leave that sort of logic behind and get serious.

The cases that have been submitted in the House, notably that of Earl Jones, concern people who were not even registered with the Autorité des marchés financiers du Québec. Even if we had an intergalactic securities commission, if those swindlers were not registered they still would not have been caught, and people would still have been duped.

We have to remain reasonable and take this seriously. The issue before us today is whether we should allow Quebec, and surely other provinces, to be stripped of a good part of its financial community for the benefit of Toronto.

Opposition Motion—Securities RegulationBusiness of SupplyGovernment Orders

3:30 p.m.

Liberal

Marc Garneau Liberal Westmount—Ville-Marie, QC

Mr. Speaker, I am going to share my time with the hon. member for Charlottetown.

Out of respect, I will start by reading the motion introduced by the hon. member from the Bloc:

That this House denounce the government’s unrelenting efforts to marginalize the Quebec nation, in particular by depriving it of the major economic lever of securities regulation, a matter that is under the exclusive legislative jurisdiction of Quebec and the provinces and for which they have established a harmonized regulatory system recognized for its effectiveness by the OECD and the World Bank, among others, and that it demand, along with Quebec’s National Assembly and the business community in Quebec, that the government immediately withdraw its draft bill.

Since the constitutionality of a national securities commission has, as we know, been referred to the Supreme Court, I do not see the relevance of this motion, which appears to me to be a semantic exercise only. However, to put it all in context, let me give you an overview of the general situation.

First, let us remember that 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.

In general, the agencies that regulate securities oversee four important areas:

First, capital leveraging through the sale of securities such as private offerings and primary distributions.

Second, corporate transparency and the continual disclosure of relevant information to investors.

Third, enforcement of the securities regulations and prevention of deceptive or fraudulent behaviour.

Fourth, the qualifications of securities traders and their good reputation and accreditation.

As for the provinces, Alberta, Manitoba and Quebec are currently opposed to a single securities regulator. Ontario, on the other hand, is in favour. British Columbia has made it known that it would be part of such a program only if provincial jurisdiction were respected. In October 2007, as we know, 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”, and that the federal government should not interfere.

Under the current regulations, securities in Canada are subject to directives from 13 provincial and territorial authorities.

In order to make a balanced presentation, I must set out the arguments on both sides of the issue.

These are the main arguments against the current system.

It is very expensive for corporations that want to attract capital to comply with all the provinces' regulations. Time is an important factor in leveraging capital, and compliance with multiple provincial regulatory schemes delays the start of negotiations.

Investors in the less populous provinces may be denied access to certain investments. Because of differences and disparities in the existing regulations, it is sometimes difficult to ensure they are enforced. More resources would have to be devoted to this.

In support of the present “multijurisdictional” model, the provinces make the following arguments:

First, it allows innovative ideas to be developed that can be adapted and be more responsive to the specific features of regional markets. Second, regulations can be more effectively administered, as the agencies with that authority acquire experience and knowledge in their regional markets.

Third, a common regulatory agency might impose compliance rules that were designed for larger multinational users and might exclude the small regional businesses, which would not be good, and thus cut them off from financing.

Fourth, the multijurisdictional model protects regional securities infrastructure that the provinces and territories have created with accountants, notaries, underwriters and other professionals.

In response 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. The Canadian Securities Administrators also introduced a harmonized electronic data system for analysis and research to make information available, called SEDAR, and a simplified national registration system for securities traders.

Once again, since we do not expect a decision to be made for another 18 or 24 months, the Bloc is trying to score political points with this motion today. We completely agree with the Bloc that the existing expertise in the different regions of Canada, particularly in Quebec and Montreal, should not be sacrificed or displaced in order to create a single commission. The Autorité des marchés financiers du Québec has a very good reputation and is recognized around the world.

Furthermore, the Conservative government's divisive approach is completely unacceptable. This is another example of the Prime Minister's poor track record on provincial-federal relations.

However, since we are still waiting to hear from the Supreme Court on this issue, and since the issue will not likely budge for another year and a half, the Bloc's motion is completely useless.

One thing is certain: the provinces are divided on this issue. So it would be counter-productive for Parliament to vote prematurely, when it is the Constitution, as interpreted by the Supreme Court, that must set the boundaries of the discussions between the provinces and the federal government. Just like Quebec, we are completely opposed to displacing the financial expertise we have in the Montreal region.

Why does the Bloc not want to wait to hear the Supreme Court opinion? Why does it want to open this debate now, when there is no serious bill on the horizon?

I am getting to the key point of my speech. Liberal governments have long been recognized for their solid financial leadership. Our stable financial system, developed by the Liberals, became an international model during the economic crisis. The best approach is to protect investments and to ensure that each of the regions does not lose its specific knowledge.

The Liberals agree that when it comes to provincial-federal relations, the Prime Minister has failed, and we are opposed to the Conservatives' unilateral approach that just results in tensions. On many occasions we have urged the government to get the opinion of the Supreme Court. Now that it has, we just have to wait to hear from the court.

So let us wait for the Supreme Court's opinion.

Opposition Motion—Securities RegulationBusiness of SupplyGovernment Orders

3:40 p.m.

Bloc

Daniel Paillé Bloc Hochelaga, QC

Mr. Speaker, I have a great deal of respect for the member for Westmount—Ville-Marie. There are different kinds of members in the House. Some are career MPs, while others come here after a brilliant career. I have to say, in all seriousness, that our colleague has had an admirable international career in the space program.

However, in his speech, he did say a number of things that were not true, such as when he said it was more expensive and more problematic. Clearly, the financial system is not his area of expertise, but he went on to answer questions. It was a fairly balanced speech.

I have just one question for him, and it has to do with his career and mine. What would he have said if, when humankind began to conquer space, the Americans had told Canada that because there was so much at stake, they were going to control everything. I am sure he would have stood up for the Canadian Space Agency as a Canadian institution and made a case for its competence. I am making a case for our competence just as he would have done for the agency.

Opposition Motion—Securities RegulationBusiness of SupplyGovernment Orders

3:40 p.m.

Liberal

Marc Garneau Liberal Westmount—Ville-Marie, QC

I thank my colleague from Hochelaga for that lovely compliment. I believe he is in the same category as me. He has come to federal politics somewhat late, after distinguishing himself in his previous career.

I presented both sides of the coin without giving my personal opinion. Those are the arguments made by the people who want a single commission and those who think it is better to keep the provincial commissions. I wanted to present the arguments openly, and that is what I did. I hope he got the main point I was trying to make, which was that the Supreme Court will examine the Constitution and issue an opinion. We should wait for the result of the Supreme Court review before moving motions like the one put forward today.

Opposition Motion—Securities RegulationBusiness of SupplyGovernment Orders

3:45 p.m.

NDP

Jim Maloway NDP Elmwood—Transcona, MB

Mr. Speaker, Senator Elaine McCoy from Alberta is not the only Albertan who thinks this measure is a misplaced one. In fact, Ted Morton, the finance minister, is certainly attacking the government for this very thing. On June 1, in the Calgary Herald, he said:

—exactly what is Ottawa trying to fix that hasn't already been addressed by, or couldn't be fixed within, the current passport system?

He indicates that the criticisms of others have been others have been resolved through 10 years of harmonization efforts to create the passport system. He said:

It is a system that works well both on a local and a national level. Internationally, Canada's passport system is recognized as among the best in the world, with the OECD and the World Bank Group rating it ahead of both the United States and the United Kingdom. And two years in a row the Milken Institute ranked Canada...as having the "best access to capital”.

It seems to me that the Conservative finance minister, the parliamentary assistant and Mr. Morton are in two different spaces. They have two diametrically opposed views of what is going on.

What are the members comments regarding the opposition from Alberta to this measure?

Opposition Motion—Securities RegulationBusiness of SupplyGovernment Orders

3:45 p.m.

Liberal

Marc Garneau Liberal Westmount—Ville-Marie, QC

Mr. Speaker, the member for Elmwood—Transcona has illustrated that this is an extremely complex matter and certain provinces, and he points out Alberta, have very clearly indicated they do not favour one national securities regulator. Quebec has made that quite clear. I believe Manitoba has also expressed similar reservations.

Given the fact that this matter has been referred to the Supreme Court, it seems to me that at this point we should allow provinces to continue to express themselves and we should wait for the Supreme Court. There is a healthy debate going on and we will find out, in due course, when the Supreme Court pronounces itself. Then we will have a solid basis on which to continue and make a decision.

Opposition Motion—Securities RegulationBusiness of SupplyGovernment Orders

3:45 p.m.

Liberal

Shawn Murphy Liberal Charlottetown, PE

Mr. Speaker, I am pleased to participate in this debate. The member for Westmount—Ville-Marie who just spoke said that there is a healthy debate going on. I want to remind the members in the House that a healthy debate on this issue has been going on for, I believe, 56 years. This issue has been debated on and off.

Of course there are strong arguments on the merits of a national securities system, that it perhaps would be more efficient, less cumbersome and less costly. It would certainly be of great assistance to the six or seven smaller provinces that do not have the capacity to come forward with a very robust system of securities regulation.

On the other hand, we have very strong arguments, to which the member referred, regarding the autonomous nature of some of the businesses in certain areas of our big country, especially the province of Quebec with its unique culture and unique business and, I would consider, a very robust system of securities regulation, and also in Alberta, which relates perhaps more to oil and gas, and in British Columbia, which is more directed to mining. These are unique markets with their own autonomous systems.

There are arguments on both sides. The government has made it part of its policy and it has, and I suggest wisely, referred the matter to the Supreme Court to decide whether or not it is constitutionally legitimate, whether or not it is within the legislative authority of the Parliament of Canada. It is my position before this House today that the debate really should not take place until that decision is rendered by the Supreme Court of Canada.

The Supreme Court of Canada could come back and say that it is certainly well within the legislative authority of the Parliament of Canada and the debate could continue. I also should point out that I believe that references have been started in the courts of appeal both in the province of Quebec and in the province of Alberta, which of course would carry on most likely to the Supreme Court of Canada.

If the Supreme Court of Canada states that the Parliament of Canada has no legislative authority to be involved in this matter, then my context in this debate would change dramatically.

Maybe the Supreme Court of Canada would come back with a hybrid decision that it is within the legislative authority of the Government of Canada but that there are caveats and conditions as to what we can or cannot do. Again the whole tenor and nature of the debate would change.

The motion reads in part, “a matter that is under the exclusive legislative jurisdiction of Quebec and the provinces and for which they have established” et cetera. Says who? That is a statement that originates from this motion. I believe it is a statement that was also made in the legislative assembly of the province of Quebec. It is a statement that has been made by other commentators, but there is a whole host of other commentators, scholars and lawyers that state the opposite.

It is my position that this debate really should take place after the decision is received from the Supreme Court of Canada. There are very contrasting and conflicting opinions on this particular issue. When we do get the opinion back from the Supreme Court of Canada, then I would suggest that the debate continue and we can debate the matter on the merits, based on the constitutional ambits as set down by the Supreme Court of Canada.

I suggest that was the right thing to do. It is not the way the Conservatives have always gone, especially in some of the crime bills and some of the bills dealing with Senate reform, but in this case we are getting an opinion from the Supreme Court of Canada as to the proper perspective for the debate.

Even if it did come back that it was within the legislative authority of the Parliament of Canada, it is very clear from the legislation, and it has to be pointed out, that provinces, if they want to protect their own autonomy, if they want to, for their own political reasons, retain the securities infrastructure and system and the regulatory framework that they have, they are certainly entitled to do that. I do not think it would be in anyone's best interest to unilaterally take over the regulation of securities, if there are certain provinces, and I assume these would be the larger provinces, not the smaller ones, that wanted to retain the legislative jurisdiction.

As far as I am concerned, right now it is somewhat of a phony debate as to whether someone supports it or does not support it. We cannot have an intelligent debate not knowing the correct constitutional framework in which the debate will occur. A decision, as the previous speaker indicated, will be tabled by the Supreme Court of Canada within the next 12 to 24 months, at which time I suggest this debate could continue. Individuals from the different parties could bring forward their respective arguments and then we could go forward on a political basis.

Having said that, I am certainly not going to support the motion. With the matter presently before the Supreme Court of Canada, I believe the debate should be tabled. A bill has not been presented by the government House leader. There is no legislation before the House right now. I do not know why we are continuing to debate this.

Maybe the intent is to stop it in its tracks, but the whole issue ought to be subject to a full debate. However, it should be subject to a full debate within the correctly established adjudicated and constitutional framework so that people cannot make statements that it is a matter under the exclusive legislative jurisdiction of Quebec. It may or may not be correct and depending on whether it is or is not correct would very much frame the debate in the House.

Having said that, I have followed this issue and some of the comments made by the second-last speaker were about efficient securities regulation. I am not going to disagree with that, but one issue I have found troubling for at least 20 years is the apparent lack of capacity right across Canada to enforce our securities regulation. I could list 50 or 60 cases where there was what I consider to be very serious fraud carried out on investors right across Canada. They are not Quebec situations; they go right across Canada. The provincial securities regulators just did not have the capacity, the wherewithal or the legislation to deal with the situation.

Perhaps the most grievous one that comes to everyone's mind, though it is a little old now, is the Bre-X case. I believe there were something like $2 billion of investors' money that disappeared. It just went. It was certainly fraudulent securities regulation, trading, everything, but in hindsight, was anyone ever convicted of a criminal offence? No. Was anyone ever convicted of any securities offences regarding this situation? No. Was there ever any money paid to any investor? No.

That repeats itself in the Michael Ritter and Earl Jones situations, et cetera. When one reads about it in the papers, one comes to the very stark conclusion that right across Canada, the provinces do not have the capacity to deal with these situations.

Studies have been mentioned. Someone previously talked about an efficient system. I have in my hand a study from November 2009 in which Pricewaterhouse ranked Canada as the fourth most fraudulent country out of 54 countries. The countries that were more fraudulent were Russia, Kenya and South Africa.

To summarize, this debate has been going on for 56 years. Legislation is not before the House. The matter has been quite correctly referred to the Supreme Court of Canada and I would like to continue the debate once the decision is rendered by that court.

Opposition Motion—Securities RegulationBusiness of SupplyGovernment Orders

3:55 p.m.

Bloc

Jean Dorion Bloc Longueuil—Pierre-Boucher, QC

Mr. Speaker, I was quite saddened to hear the hon. member for Westmount—Ville-Marie reduce this debate to a purely legal issue, namely whether the Supreme Court of Canada will say that the federal government has the right to interfere in securities, as it intends to.

We can almost be certain that the court will side with the government, especially since every one of the court's judges is appointed by the Canadian government, which makes it not a Canadian institution, but a federal institution.

It is like a federal institution asking another federal institution whether the federal government has the right to interfere in this area. The real question from Quebec's perspective is: will this serve the interests of Quebec or not? That is the concern of the Bloc Québécois. It is obvious that it will not.

All the stakeholders in Quebec, the National Assembly, the major business groups, the major financial groups, know that tens of thousands of good jobs will be lost in Quebec and that English will become the only language of work in the financial sector and—

Opposition Motion—Securities RegulationBusiness of SupplyGovernment Orders

4 p.m.

Conservative

The Acting Speaker Conservative Barry Devolin

Order. The hon. member for Charlottetown.

Opposition Motion—Securities RegulationBusiness of SupplyGovernment Orders

4 p.m.

Liberal

Shawn Murphy Liberal Charlottetown, PE

Mr. Speaker, the member prefaced the question whether it is good for Quebec, but he asked why we would refer this to the Supreme Court of Canada.

The third sentence of the motion states, “a matter that is under the exclusive legislative jurisdiction of Quebec”, and my question is, says who? That has never been adjudicated on by the Supreme Court of Canada. That statement may be correct, or it may be incorrect, and based upon whether it is correct or incorrect would very seriously determine the parameters of this debate and the opinion of every person who participates in the debate. I think it is quite legitimate to get whether or not it is within the legislative jurisdiction of Quebec or it is within the legislative jurisdiction of Canada.

Opposition Motion—Securities RegulationBusiness of SupplyGovernment Orders

4 p.m.

NDP

Jim Maloway NDP Elmwood—Transcona, MB

Mr. Speaker, the bad news for the Conservatives does not stop on this national securities regulator issue. Senator Elaine McCoy has a lot to say about how this will be bad for people and companies, the financial services industry in Alberta. In addition, Ted Morton, Alberta's finance minister, has a lot to say about the subject. He said:

This is not just about securities, but all financial services that have been regulated by the provinces under their Section 92 jurisdiction over “property and civil rights”,-- including pensions, credit unions and insurance.

--in fact for 100 years--

When it comes to diversification of the Alberta economy, financial services is one of the fastest growing sectors--with the potential for much greater growth. The job-multiplying effect of having a provincial-based securities commission has been well documented by Quebec. As Canada and the rest of world emerges from the recession, Alberta will lead the way. If we let the Alberta Securities Commission get scooped up and transferred to Toronto, we can say good-bye to thousands of spinoff jobs in investment banking, law, accounting and financial analysts.

This is what the Alberta treasurer had to say about this measure.

I would like to ask the member what his comments would be vis-à-vis his province of Prince Edward Island.

Opposition Motion—Securities RegulationBusiness of SupplyGovernment Orders

4 p.m.

Liberal

Shawn Murphy Liberal Charlottetown, PE

Mr. Speaker, again, this highlights the debate. The member talked about a political issue. He quoted a senator and he quoted Ted Morton, whether it is good for Alberta or bad for Alberta, but these are political discussions which should be had after we get the ruling from the Supreme Court of Canada.

To answer his last comment, Prince Edward Island is a province with 134,000 people. It does not have the capacity to deal with the sophisticated fraud that is going on in Canada now. As for the two people from Alberta that he quoted, I refer the member to the recent Michael Ritter situation in which $270 million was bilked, mostly from U.S. investors. I think that very little was done by the Alberta Securities Commission. These situations repeat themselves right across Canada.

Again, this is a political debate that should be had after the Supreme Court renders its decision.

Opposition Motion—Securities RegulationBusiness of SupplyGovernment Orders

4 p.m.

Bloc

Pierre Paquette Bloc Joliette, QC

Mr. Speaker, I am very happy to speak on this opposition day. The hon. member from Hochelaga introduced a motion that, in my opinion, is completely relevant to the Conservative government's offensive for a Canada-wide securities commission. I thank him for this initiative and I want him to know that he will have my vote on Monday evening.

It is important to read this motion since it contains all the arguments brought forward by Quebec's business and political circles, as well as by journalists and observers. Seldom have we seen a consensus like this in Quebec with respect to a federal initiative. The whole Quebec nation is against the Conservative government's offensive on the financial sector, which is, moreover, very remarkable and surprising, given the very technical nature of the debate. Sometimes, the public has a hard time understanding all the ins and outs. Despite everything, the consensus in Quebec is very strong.

Both the elected members from Quebec in Ottawa, including the Bloc Québécois members, and the members of the National Assembly played a very important role in this matter by taking leadership and explaining the dangers of the draft securities commission bill proposed by the Conservative Minister of Finance. While it does not happen often, business people are joining forces against this completely unacceptable bill.

Here is the motion:

That this House denounce the government’s unrelenting efforts to marginalize the Quebec nation, in particular by depriving it of the major economic lever of securities regulation, a matter that is under the exclusive legislative jurisdiction of Quebec and the provinces and for which they have established a harmonized regulatory system recognized for its effectiveness by the OECD and the World Bank among others, and that it demand, along with Quebec's National Assembly and the business community in Quebec, that the government immediately withdraw its draft bill.

In starting by saying, “That this House denounce the government’s unrelenting efforts to marginalize the Quebec nation...”, the hon. member for Hochelaga describes very well the context in which the Conservative offensive in the financial sector occurs. If this were the Conservative government’s only attack on the Quebec nation, we might think it was an idée fixe of the finance minister or of the Prime Minister when he studied economics and after doing a paper on it made it his pet subject. If that were the case, we might think we could make them see reason.

It is very clear, though, that this is just one piece of the puzzle, a part of a greater whole, a strategy that is being implemented but has not succeeded thanks to the Bloc Québécois, which is there to block it. The attempt to weaken, undermine and marginalize the Quebec nation can be seen in Bill C-12, which reduces the political weight of the Quebec nation in the House by increasing the number of seats in Ontario, British Columbia and Alberta while the government refuses to make any promises about the proportion of MPs from Quebec in the House, as well as in the draft legislation on a Canada-wide securities commission.

Other initiatives are cut from the same cloth, for instance the dismantling of the firearms registry. In question period, my colleague from Ahuntsic reminded the House that three-quarters of Quebeckers are in favour of the firearms registry. Among young people 18 to 24 years old, this proportion rises to 85%. There is a strong consensus therefore. This government, as well as members from other Canadian parties, support the idea, though, and are trying to dismantle what the Quebec nation considers an essential tool. Refusing to listen to Quebec is just another way of marginalizing it.

There is also the bilingual judges issue. The debate currently unfolding in the Senate is surrealistic in tone. Even some francophones have been heard to say that competent people would be held back, when we know very well no unilingual francophone has ever sat on the Supreme Court.

There is something surrealistic about it. The strangest thing, and this is a real paradox, is that very often the Bloc Québécois is the only party that makes a real effort to uphold the 1867 Constitution. The other Canadian parties no longer care about it at all. We do not believe in the Official Languages Act, but at least we push to have French recognized as the equal of English.

In theory, the Official Languages Act should lead all members of the House to support this bill, but it no longer counts. Or it only counts one way. It is a bit like the Supreme Court, as my colleague from Longueuil—Pierre-Boucher said, which like the tower of Pisa always leans one way. We do not have any illusions, therefore, about the decision the Supreme Court will reach on the draft securities commission bill.

In any case, this is not a legal debate but a political debate. It is part of the federal government strategy, especially the Conservative government, to marginalize and weaken the Quebec nation.

I want to finish by saying—and this will certainly please the Transport Minister—that the purpose of the entire economic development strategy orchestrated from Ottawa is also to weaken and undermine Quebec.

This strategy has two pillars. First, oil, the big oil companies—the friends of the Minister of Finance—and traditional motor vehicles using gasoline or hydrocarbon products. Then the financial system, which absolutely must be centred in Toronto. Those are the two pillars of Canada's industrial strategy. Against that background, the concerns and interests of Quebec are marginal and matter little. That is the context for this bill.

In the first part of the motion that the hon. member for Hochelaga put forward, it is very clear that this draft bill is one more aspect of the government's unrelenting efforts to marginalize the Quebec nation, in particular by depriving it of the major economic level of securities regulation, a matter that is under the exclusive legislative jurisdiction of Quebec and the provinces. Everyone acknowledges that, even the Minister of Finance. It is perfectly clear in the Constitution of Canada. To be precise, powers in securities matters are given to the provinces as part of their jurisdiction over property and civil rights set out in section 92(13) of the Constitution Act, 1867.

As a result, it is quite obvious that this bill is an attempt to do indirectly what cannot be done directly. There have been a number of attempts along these lines. This is not the first time that a federal government or a minister of finance, whether Liberal or Conservative, has tried to establish a Canada-wide securities commission. They always run up against the very clear statement in the Constitution. I have just mentioned the specific section of the Constitution Act, 1867, which makes it clear that this is under the legislative jurisdiction of Quebec and the provinces.

So they have invented a scheme: voluntary membership in the commission. The scheme fools no one. It is exactly the same method which the Conservatives are now using to change the Senate. They introduce Bill C-10, seeking to limit senators' terms. Then, in the Senate, another bill is introduced saying that senators should be chosen from a list of people who have been publicly elected. They know that the Senate cannot be substantially changed in a direct way without entering into constitutional negotiations with Quebec and the provinces. So they are trying a backdoor way of doing what they cannot do directly. That is exactly what this bill is doing; it is trying to impose a Canada-wide securities commission, contrary to Quebec's exclusive jurisdiction over the area.

As I mentioned earlier, and as a number of experts have also said: the Minister of Finance's voluntary membership is a con job, and it fools no one. Mr. Lortie, a former CEO of the Montreal Stock Exchange, even said so in his report.

They will try to balkanize the system that exists at present. They will ensure that pressure is brought to bear by the financial centres themselves for there to be one securities commission, which is not necessary at present because the system is working very well. That is what is in the motion before this House. This field is under the exclusive legislative authority of Quebec and the provinces, and the provinces and Quebec have put a harmonized regulatory system in place, the effectiveness of which is recognized by the OECD and the World Bank, among others.

It took several years to put this very sophisticated system in place, we have to acknowledge that. It was not easy, but it has been done. We are in the second phase of implementing the passport system, which means that once an issuer has a licence in a province or in Quebec, it may issue in other jurisdictions. That is then recognized by the authority in the other provinces or territories. It is a plan whose effectiveness has been recognized by the OECD. It has identified the Canadian system as the second best system in the world. I will give you the reference. It might be worth it for the Conservatives, particularly those from Quebec, to familiarize themselves with it.

I would also like to take this opportunity to clarify something. When we see that bills of this nature are plainly contrary to the interests of the Quebec nation and members or ministers from Quebec are being used to sell them to Quebeckers, we cannot refrain from stating a fact, and it is not an insult. These Quebeckers are serving a purpose in the sense that they are here to sell a plan that is contrary to the interests of the Quebec nation and could not be sold by a minister who came from Ontario or Alberta.

The Minister of Finance would have no credibility if he tried to sell this plan in Quebec, whether to the business community or to the people of Quebec as a whole. In fact, he was the Minister of Finance of Ontario, which is the only province that is not participating in the passport system. At present, he is the black sheep in our system of securities regulation in Quebec and he would have no credibility. So they have to use Quebec Conservatives. I think that is somewhat unfortunate for them. Their strategy is not working, but it is still sad to see these Quebeckers stoop to that level.

So I said there was an article in issue 43 of the OECD Journal of Economic Studies published in 2006. Since then, the passport system has made enormous progress. Four authors wrote an article entitled Regulation of Financial Systems and Economic Growth in OECD Countries: An Empirical Analysis. It is well worth reading; it is very well documented and very rigorous. They conclude that the financial regulatory system in Canada is the second best in the world. I will give another example. The American system is ranked fourth. The system in the United Kingdom, the leader in the development of the financial sector worldwide, is in fifth place, and Australia is seventh.

This is an extremely effective system and, as I said, it is recognized by the OECD and the International Monetary Fund. It is totally fallacious to talk about the need for a Canada-wide commission on the ground of effectiveness. We have a harmonized regulatory system at present, the passport system, the effectiveness of which has been recognized by the OECD and the World Bank, among others.

As the National Assembly of Quebec has done, the Bloc calls for the bill to be withdrawn.

On May 27, 2010, the day after the Minister of Finance unveiled his draft legislation, a motion was unanimously adopted by the Liberal Party of Québec, a federalist party, the ADQ, an autonomist party that needs to define itself more, and by the Parti Québécois. The motion reads as follows:

That the National Assembly denounce the obstinacy of the federal government in tabling unilaterally a bill to create the Canadian Securities Commission;

That it denounce this invasion into the fundamental jurisdictions of Quebec;

That it recall the opposition of the Quebec business community;

[That, finally,] it urge the Canadian government to reconsider this decision and, failing that, the Canadian Parliament not to pass such an act.

It echoed a first motion unanimously adopted in October 2007, after a document was tabled. If my memory serves me well, it was the finance minister's economic statement in which he first outlined the concept of a national securities regulator. The National assembly unanimously adopted that motion, which read:

That the National Assembly ask the federal government to abandon its Canada-wide securities commission project.

Therefore, the National Assembly, which represents the Quebec nation, is very clear on this matter. There is no doubt about it —it will be a hard-fought battle if the federal Conservative government continues to press on.

In the motion moved by the member for Hochelaga, there is a reference to the fact that the business community wants the bill to be withdrawn. I believe it is worthwhile naming those opposed because not just the member for Hochelaga, the member for Joliette and all Bloc members are against this bill. It is not just the members of the National Assembly who are against this bill. The Association de l'exploration minière du Québec, the Barreau du Québec, the Caisse de dépôt et placement du Québec, the Cascades Group, the Board of Trade of Metropolitan Montreal, the Quebec City Chamber of Commerce, the Chambre des notaires du Québec, the Chambre de la sécurité financière, the Conseil du patronat du Québec, the Fédération des chambres de commerce du Québec, Fondaction CSN, the QFL Solidarity Fund, the Jean Coutu Group, the Institute for Governance of Private and Public Organizations, the Institut québécois de la planification financière, Université Laval professor Jacques Saint-Pierre, Jean La Couture, corporate director, president of Regroupement des assureurs à charte du Québec, are also opposed. And there are others, such as Power Corporation—

Opposition Motion—Securities RegulationBusiness of SupplyGovernment Orders

4:15 p.m.

An hon. member

Canam, Quebecor.

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4:15 p.m.

Bloc

Pierre Paquette Bloc Joliette, QC

And others.

Constitutional expert Henri Brun has also spoken out against this. There is also Michel Nadeau, who was a journalist with Le Devoir and then worked for the Caisse de dépôt et placement. There is also Canam, Quebecor, Mouvement Desjardins, Power Corporation, La Capitale Financial Group, Transat, Transcontinental, Molson Coors, Alimentation Couche-Tard, I already mentioned Cascades, the SSQ, an insurance company. Once again, I spoke about Pierre Lortie in my speech. I already mentioned Jean La Couture. There is also Jean-Marc Fortier, an associate of Robinson Sheppard Shapiro, a very reputable law firm, with whom I have worked before. And there are many more.

As I mentioned at the beginning of my speech, it is extremely rare for business people to get involved in politics. They fear it and know little about it. I think this is a sign of cohesiveness in the Quebec nation. Therefore, this bill should be withdrawn. If the Conservative government persists, it is clear that there will be a major crisis, especially since, as I mentioned, this is not the only problem in the relationship between the federal Conservative government and the Quebec nation.

As well, Quebec's constitutional jurisdiction is obvious. It has been acknowledged by the Minister of Finance and the Conservative government. And when they use the argument that participation is voluntary, they are conceding that we are correct in saying that this is Quebec's jurisdiction and that of the provinces.

Their argument of a more effective system does not hold water either because the passport system works very well. Once again, if Toronto and Ontario participated, it would work even better, but we will not punish those who work to make it function and reward those who throw a wrench in the works.

As I said, it is obvious that the plan is to strip Quebec of its financial sector. We have already lost a part of the Montreal stock exchange activities to Toronto. This must stop somewhere and it will stop with the Minister of Finance's draft bill concerning the national securities commission. It is a bill that will not pass and I can guarantee that the Bloc Québécois will work to that end along with all of Quebec's socio-economic stakeholders.

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4:20 p.m.

NDP

Jim Maloway NDP Elmwood—Transcona, MB

Mr. Speaker, this morning the Parliamentary Secretary to the Minister of Finance pretended that he and the Alberta finance minister were very close on this issue. I decided to check into what the Alberta minister of finance had to say about this whole idea. Here is one of the things he said:

Internationally, Canada's passport system is recognized as among the best in the world, with the OECD and the World Bank Group rating it ahead of both the United States and the United Kingdom. And two years in a row the Milken Institute ranked Canada first as having the “best access to capital”.

That is a far different story than what we heard from the parliamentary secretary just a couple of hours ago. The minister went on to say:

The federal government has yet to identify any needed improvement that could not be accommodated within the existing system.

And further he said:

--a single national regulator in the U.S....certainly didn't stop Bernie Madoff...not to mention Enron or WorldCom

Most important, he pointed out that there are a number of financial services that have been regulated by the provinces for 100 years and these will be at risk, and jobs will be moved out of Alberta and to Toronto as a result of this measure.

I would like the member to make some comments.

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4:25 p.m.

Bloc

Pierre Paquette Bloc Joliette, QC

Mr. Speaker, the member is absolutely right and I would like to thank him for his question. There will be significant job losses in Alberta as well as Quebec. My colleague has mentioned the quality of regulations and protection for investors, which is of very strong in the current system. In fact, I was the one who gave him the reference.

Our system, which is not federal or national, but is administered by the provinces and territories, is ranked second in the world, according to the OECD. It is interesting to note that sectors under federal regulation are ranked lower. For example, when it comes to regulating the banking sector, which is under federal jurisdiction, Canada stood ninth, whereas the United Kingdom ranked second. As for regulations concerning the Competition Act, Canada placed fourth while the United States was first.

It seems that a passport system that works well produces better results than a centralized regulatory system in Ottawa would, be it in terms of the banking system or the Competition Act.

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4:25 p.m.

Bloc

Guy André Bloc Berthier—Maskinongé, QC

Mr. Speaker, I would like to congratulate our colleague from Joliette on his excellent speech. With their bill, the Conservatives hope to centralize the securities market in Toronto.

The hon. member for Joliette and the many members who spoke during today's opposition day have demonstrated that the current system works very well. It is effective and one of the best in the world. This is recognized by the OECD and the World Bank.

Can my colleague tell me how a Canada-wide commission might give investors less protection when it comes to securities than the current system, which is very effective?

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4:25 p.m.

Bloc

Pierre Paquette Bloc Joliette, QC

Mr. Speaker, no argument justifies implementing a Canada-wide securities commission. The current system works and is recognized around the world. Constitutionally speaking, this matter falls under provincial and Quebec jurisdiction. So some other explanation is needed. Why does the Conservative government, the federal government, want to create a Canada-wide securities commission?

As I explained earlier, this is an economic and industrial development strategy they have developed based on the interests of the Canadian nation. This strategy targets two main sectors: the automotive and oil sectors—in Ontario and western Canada—and the financial sector.

At present, Quebec, Montreal, Toronto and Alberta all share the pie. The portion regulated by Ontario is only 22%. The larger part is regulated elsewhere. To destroy that system, the Conservatives are going to create a problem by implementing this Canada-wide securities commission. This will cause such a mess that the business community, even in Quebec—particularly because of the need to ask for a permit and the elimination of the passport system—will lobby for a single securities commission.

That is the ultimate goal of the Conservative government, all for Toronto's benefit.

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4:25 p.m.

NDP

Jim Maloway NDP Elmwood—Transcona, MB

Mr. Speaker, I am pleased again to discuss this issue today. Once again, I am going to quote from the article written by the Alberta minister of finance. He said that all financial services have been regulated by the provinces for the last 100 years. We are talking about credit unions, insurance and pensions. There is a lot of jobs at stake.

He said:

When it comes to diversification of the Alberta economy, financial services is one of the fastest growing sectors...The job-multiplying effect of having a provincial-based securities commission has been well documented by Quebec. As Canada and the rest of the world emerges from the recession, Alberta will lead the way. If we let the Alberta Securities Commission get scooped up and transferred to Toronto, we can also say goodbye to thousands of spinoff jobs in investment banking, law, accounting and financial analysts.

I assume that will be the same argument that will apply to Montreal. I assume that will be the same argument that Manitoba will use and has used for the last 10 years.

Would the member like to add any further comments to that?

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4:30 p.m.

Bloc

Pierre Paquette Bloc Joliette, QC

Mr. Speaker, that is quite right. I have the figures here. For Montreal, we are talking about 97,000 direct jobs and 150,000 direct and indirect jobs. For Quebec as a whole, we are talking about 155,000 direct jobs and 300,000 direct and indirect jobs.

We have already seen job losses in this sector resulting mostly from the transfer of stock exchange activities from Montreal to Toronto. In Quebec, between 1991 and 2008, 8,000 jobs were lost, whereas 52,000 jobs were created in Ontario, as well as in Alberta, considering that the oil boom also had an impact. The same thing happened in British Columbia. However, Quebec is especially threatened by the future establishment of a national securities regulator since jobs are already moving from Montreal to Toronto.

I did not finish the list of those who want the federal government to withdraw the draft legislation on the securities commission. The cities of Montreal and Quebec are part of the coalition and for good reason. They are very aware of the effect of the Minister of Finance's major move.

I will close by stating that they already plan on spending $150 million to establish this commission even though we already have a very efficient system in place. That is throwing money out the window. It is like the fake lake, the cardboard decorations and the money being spent to prepare for the G8 and G20 meetings.

I am convinced that the battle is just beginning and that we can only be victorious.

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4:30 p.m.

Bloc

Guy André Bloc Berthier—Maskinongé, QC

Mr. Speaker, I think that this bill simply aims to steal from Montreal's financial sector to strengthen Toronto's.

Can my colleague from Joliette explain how the Conservative and Liberal members elected in Quebec can go against the unanimous consensus of the National Assembly? It has told the federal government to maintain our current financial system because it works and it supports our economic initiatives.