moved:
That, in the opinion of the House, the government should immediately abandon the idea of creating a common securities regulator, since securities regulations fall under the legislative jurisdiction of Quebec and the provinces and because this initiative is unanimously condemned in Quebec.
Mr. Speaker, it is rather distressing that the Bloc Québécois has to put forward this morning the kind of motion you just read.
The fact of the matter is that the Conservative government, and the current Minister of Finance in particular, seem to be obsessed with taking away from Quebec important rights with respect to financial administration and centralizing everything for all of Canada in Toronto. However, the securities commission, and anything relating to it, is a constitutional responsibility of the Government of Quebec.
We rise in this House because the Bloc Québécois is the torch-bearer of the consensus on this issue in Quebec and, in the budget brought down on February 26, the Minister of Finance clearly indicated that he will be continuing with his steamroller approach to establishing a Canada-wide securities regulator, even though that is unanimously condemned in Quebec.
That is why the Bloc Québécois is bringing this matter to the attention of the House today. A clear message must be sent to the government that it would be unacceptable.
Why pay special attention to that issue? Because the whole area of securities represents an important sector of economic activity. For one thing, securities are fungible, negotiable and transferable instruments that can be listed on the stock exchange. The two main classes of securities are stocks and bonds, but there are others, such as certificates of investment and warrants.
Securities trading is currently regulated by Quebec and the provinces. In Quebec, the Autorité des marchés financiers is the agency responsible for regulating securities. For example, a company looking to issue a first series of shares on the Quebec stock market has to abide by the rules set out by the Autorité des marchés financiers. We share a passport system for securities regulation with the securities commissions of the other provinces, except Ontario. That province has taken the approach of the current Minister of Finance. This shows that his attitude is really to move toward giving to Ontario a responsibility that is currently that of the provinces and which, in Quebec, has always been carried out seriously.
It is important that the public know that the Bloc's position is also the unanimous position of the National Assembly of Quebec. It is not a position taken solely by the representatives of sovereigntists. On this issue, we represent the entire National Assembly of Quebec in this House.
I will read the motion adopted unanimously by the National Assembly on October 16, 2007.
THAT the National Assembly ask the federal government to abandon its Canada-wide securities commission project.
The wording could not be clearer. The motion indicates that the three parties in the National Assembly of Quebec want the federal government to stop the offensive that the Liberals began and the Conservatives have continued, because what the government is doing is not what we want.
Even after this motion was adopted in October 2007, the Minister of Finance decided on February 26 to go ahead. He heard from Quebec's finance minister, who, on this issue, shares our views and speaks for the Government of Quebec.
I want to read the letter that Monique Jérôme-Forget, Quebec's finance minister, sent Mr. Flaherty on February 28, two days after he brought down the budget.
Dear colleague,
I have noted the appointment of your expert panel charged with making suggestions and recommendations concerning securities regulation in Canada.
And here, every word is important. The minister goes on:
First of all, I reiterate that the existing regulatory system in Canada works well and satisfies both the needs of pan-Canadian participants and the interests of the various regions. Accordingly, I will continue to oppose the implementation of any model leading to the concentration of market oversight responsibilities in the hands of a common or single regulator, regardless of how you call it.
Quebec's finance minister is clearly saying that she does not want anything to do with the model that the federal Minister of Finance wants to put in place and that he talked about in his budget. She goes on:
The passport system that the participating provinces and territories are setting up is a significant and unprecedented initiative to further simplify matters for pan-Canadian participants. It is a cooperative approach by the provinces and territories that enables them to continue to monitor their local interests. The systematic refusal to acknowledge the advantages of such a system leads me to wonder whether all this effort is truly aimed at improving protection for the investing public.
Quebec's finance minister is wondering whether the current federal Minister of Finance effort is truly aimed at improving protection for the investing public and we might ask ourselves the same question. Indeed, as far as the issue of securities is concerned, the model developed in Quebec and Canada has been recognized by the International Monetary Fund as an excellent model for providing satisfactory services using a decentralized approach.
In the past, on a number of occasions, some original initiatives have been taken in Quebec and other provinces. Just look at the stock savings plan implemented by Jacques Parizeau. This was followed by action focusing on how to ensure compliance with the law. Recently there was the Norbourg case where a person was sentenced to 12 years, which is something we have never seen the federal government do. And, the RCMP did not get involved in this case even though it could have.
The current model in Canada has the flexibility that we wanted to see in the Constitution. Quebec, for whom we represent the consensus here, would like that model to be upheld.
I will continue to read the letter from Quebec's finance minister.
I must say that the federal government could apply its energies much more productively if, in its fields of jurisdiction, it worked to more effectively crack down on economic crime rather than trying to impose itself in a field of exclusive provincial jurisdiction.
This is nothing new. The federal government, which has never been able to stick to its own jurisdictions, is always tempted to meddle in other areas of jurisdiction. Securities are the Minister of Finance's current obsession.
I am going back to the minister's letter.
Given the mixed, to the say the least, results it has achieved in combating economic crime, in spite of the money spent, it seems to me that the federal government is not doing enough to assume its responsibilities, in particular regarding criminal law.
I think the Quebec finance minister's opinion is quite accurate—harsh, but accurate—and that indeed the federal government would do much better to take care of its own responsibilities than to try to meddle in those of others.
I will finish reading the letter from Quebec's finance minister.
As for the expert panel—which the minister appointed—I note that you have ignored the proposals made to you by the Provincial-Territorial Council of Ministers of Securities Regulation. In so doing, I believe you have missed a good opportunity to obtain information that would have helped you better understand the point of view of the provinces and territories. Unfortunately, I fail to see that yet another panel, whose conclusions seem predictable to us, can bring anything new to this debate.
Believe me when I say that I am sorry to see you invest your effort and good will, which I in no way doubt, in such an ill-advised initiative when your energies could be applied much more productively.
A copy of this letter was sent to all the ministers responsible for securities and to the members of the panel.
Quebec's finance minister is clearly disapproving, taking the same line as the unanimous motion by Quebec's National Assembly. The minister has also harshly criticized the Minister of Finance's manipulative use of the panel. We should remember that initially, this panel was created to evaluate the existing system and the other possibilities. But the Minister of Finance decided to use it as a tool to help put forward his proposal. The budget clearly mentions a “common securities act” that the minister wants to develop by the end of 2008 for all of Canada. The Bloc Québécois is against this, as is all of Quebec. Quebec cannot allow such an important tool out of its control.
Let us remember that there is an international securities association, and that within that association Quebec speaks for Quebec. We will recall the entire process we went through over the idea of the Quebec nation, the motion that was adopted here. So what we have here is a double standard. A motion about the nation is adopted, and on the other hand the federal government’s action would aim to deprive Quebec of one of the rare areas where it can speak directly to the international community, through the international securities association. Essentially, this amounts to the federal government looking for information so it can go and speak on the international scene about a matter it does not control. Quebec is at the controls in this area, and wants to stay there. That is what our motion is intended to do today.
We are innovators in this area. We have developed a passport system with the securities commissions in the other provinces. The passport system facilitates interprovincial transactions. This means that a business in Quebec that intends to issue shares or do something involving securities will be able to use that system to do it based on its recognition in Quebec and to do it in the other provinces.
This is a screening system comparable to what in fact exists through contacts between education ministers in the various provinces. This is where Quebec wants investments to be made. The system has to be as permeable as possible to enable companies to do business in all of the provinces, in a way that is completely consistent with the jurisdiction exercised by Quebec and the provinces in this area. As well, the federal government would have to abandon its attempt to bulldoze the province’s responsibilities into its own yard.
In Quebec, the Autorité des marchés financiers is the body that enforces the rules of the game in terms of regulating the processes by which a business issues shares and bonds. The Autorité des marchés financiers can apply sanctions to businesses or individuals who fail to comply with the Securities Act. The Autorité des marchés financiers can initiate prosecutions in the Court of Québec leading to fines and imprisonment for individuals who are convicted. However, those prosecutions are not under the Criminal Code, as in the case of Vincent Lacroix. Although he was convicted under the Act respecting the Autorité des marchés financiers, which is legislation under Quebec’s jurisdiction, other charges might be laid under the Criminal Code by the RCMP, which is under federal jurisdiction.
The passport model developed in Quebec and the other provinces corresponds exactly to the model that currently exists in Europe, between sovereign countries that apply the same system. Please do not tell us that the current model in Quebec is outmoded. The European Economic Community is a very modern body that is expanding and that decided to go ahead and do this. We would hope that the federal government will exhibit the same openness so that the system can be modernized to allow for greater transfer permeability, while not interfering in matters under Quebec’s jurisdiction.
The mission of the Autorité des marchés financiers is to enforce the legislation regulating the financial sector, including insurance, securities, deposit institutions—except banks, which are under federal jurisdiction—and the distribution of financial products and services. More specifically, the Autorité des marchés financiers must provide assistance to consumers of financial products and services and ensure that the financial institutions and other regulated entities of the financial sector comply with the solvency standards applicable to them as well as the obligations imposed on them by law.
There are all kinds of issues, in this regard, subject to the Civil Code. We have two different systems in Canada: the Civil Code in Quebec and common law in the rest of the country. We have different ways of doing things when it comes to how securities are handled, and that is one of the reasons why we want Quebec to retain full responsibility for this sector.
The Autorité des marchés financiers also supervises the activities connected with the distribution of financial products and services; supervises stock market and clearing house activities and monitors the securities market; sees to the implementation of protection and compensation programs for consumers of financial products and services; and administers the compensation funds set up by law.
The different system we have developed in Quebec reflects our social values, which have rubbed off to some extent on how securities are handled. If there were just one Canada-wide system, all the particularities of the Quebec system would immediately be lost, and that is another reason why we want to continue with our own system.
Take, for example, the federal restrictions on insurance retailing by banks. In Quebec, we decided a long time ago to allow the Desjardins Group to operate in this market to facilitate its interaction with consumers and provide them with more choice. The initiative shown by a man like Jacques Parizeau, who often proved very innovative in the use of financial tools to help Quebec develop, was instrumental in the emergence of a system unique to Quebec. We could not have developed these tools under a federal, Canada-wide securities regulator, and most importantly, we would no longer be able to in the future.
Under all its responsibilities for securities, the Autorité des marchés financiers oversees the proper operations of securities markets and ensures the protection of investors. To do this, it analyzes disclosure documents regarding securities distributions or public offerings. The entire language issue also arises in this regard. Under a Canada-wide system, things would be done quite differently.
The Autorité des marchés financiers makes sure that reporting issuers, i.e. all organizations that have issued public offerings, provide securities holders, the shareholders, and the other market participants with the financial statements, MD&As and other documents required by law and regulations.
It ensures that securities issuers and other financial sector participants adhere to their obligations, for example, by filing insider reports within the specified time periods. It also oversees the establishment and implementation of orientations and regulations pertaining to capital markets.
It is very clear, therefore, that this an entire sector of the economy that is very important and growing ever more so because of all the things being taken over by the private sector. There are also all the international activities with the globalization of capital.
The fact that each province has its own regulators means we can have different, more flexible approaches. We want this social value maintained. We do not want it all changed, either for the Canadian economy as a whole or for Quebec, which has developed its own approaches and wants to continue implementing them.
Unfortunately, the 2008 budget confirmed the Conservative government’s intention to establish a single commission. To do that, the minister mandated an expert panel to prepare a bill that would create a single securities commission. That means the House will be asked to deal with a bill that flies in the face of the constitutional responsibilities of Quebec and the provinces on this matter. I do not know how the bill will be drafted. Will they be forced to use a notwithstanding clause? Do they want to open the whole constitutional question? Will they try to slyly get around it using regulatory amendments or special approaches? Is the Minister of Finance trying to come up with a negotiating tool that will encourage Quebec to give in? Quebec will not give in on this issue because it is unanimous and wants to retain its authority in financial markets. That is one of the strengths of our economic action and we want to be able to retain it. Let us remember that the expert panel's report will be presented in late 2008.
In our opinion, this is an unacceptable situation. The minister stubbornly persists with a bill that goes against the unanimous vote of the National Assembly, which is a flagrant violation of Quebec’s constitutional jurisdiction. We will continue to defend Quebec against the centralizing tendencies of the federal government.
It was a waste of time changing the government. We are always faced with the same situation. Those who were elected—or at least those elected members who talk about decentralization during election campaigns and, more specifically, the current Prime Minister—wanted to give Quebec its rightful place. The day after the election, we were already starting to feel this. As time goes by, the government, whether Liberal, Conservative or other, has been calling for a centralizing approach that is not appropriate and, in addition, does not correspond to fields of jurisdiction. The Bloc Québécois is now the best tool for defending Quebec on the floor of the House of Commons.
This seems to us once again a very flagrant example of the fact that the only solution is for Quebec to become sovereign. Once Quebec is a country, it will have authority in terms of financial markets. We will no longer be forced to deal with attacks such as the one the Minister of Finance is now leading in an effort to change, indirectly, an existing provincial jurisdiction.
Since 2003, the matter has again moved to the forefront of federal politics. The Liberals established an expert panel when they were in power. In 2005, the Ontario government mandated a group of experts, led by Purdy Crawford, to examine the advantages of a single securities regulatory system. Clearly, that report was written to be able to say that it would be better to have a single regulator. The idea surfaced in the 2006 federal budget, where the government announced that it was committed to working with the provinces and territories in order to establish a common securities regulator.
In my opinion, we can clearly see the federal government's steamroller tactics, regardless of the party in power.
At the same time, we see the unanimous position of Quebeckers. This unanimous position was demonstrated in a Quebec National Assembly motion and is defended by the current Quebec finance minister, a federalist minister who finds the Conservative government's approach unacceptable.
The unanimous position of Quebeckers is defended in this House by the Bloc Québécois, which is calling on the House of Commons here today to force the Conservative government to stop its steamroller tactics. Despite past government initiatives, we would like to be supported on this. One thing that is certain is that all Quebeckers are behind us. We will not give up until the Conservatives decide to abandon this plan that in no way serves Quebec's economic future.
