Jim Flaherty

[Business of Supply, May 28th, 2008]

Mr. Chair, I certainly thank the member for Peterborough for his excellent work on the finance committee in this House and for the people of Peterborough. He has been a tremendous advocate for those people in the great city and county of Peterborough as well.

I was surprised. The last part of the member's question was interesting. It was about the change in the NDP position. I am not quite sure what has happened, but the former finance critic, the member for Winnipeg North, who only a few months ago said:

[I am] convinced of the need for a national securities regulator—rather than the piecemeal provincial approach...Canada does not seem to have the tool box necessary to deal with corporate fraud.

I was not that surprised that the member for Winnipeg North took that position given the support of the National Union of Public and General Employees for the same idea and by CUPE, the Canadian Union of Public Employees, which said:

Canada's securities...regulators have a dismal record....Canadians have been embarrassed...that regulation and enforcement of securities crime in Canada is so weak--

We know that the Liberal Party supports a common securities regulator for Canada. Of course, we do on the government side of the House and for good reason. This is an economic union issue for Canada. We have relatively free flow of capital in the world today. In Canada we still have 13 securities regulators. This is inefficient, ineffective and, in fact, is a competitive disadvantage for Canada.

As the hon. member for Peterborough pointed out, two events have occurred in the last year that offer further support and reinforce the need for action on this agenda for a common securities regulator.

First of all, the issues related to non-bank backed asset-backed commercial paper where the entities were largely, if not solely, supposed to be regulated by provincial authorities in Canada. We regulate at the federal level the banks. We regulate substantially in the insurance sector, but we do not regulate in the securities sector. I think sometimes that is a surprise to many Canadians when they learn that we do not have a unity in terms of that regulation in Canada.

This is an issue with respect to what went on concerning non-bank backed asset-backed commercial paper. Also, the issue that was raised by my hon. friend from Peterborough has to do with neutral recognition of securities regulators around the world or free trade in securities.

Canada was taking a leading role on this issue in the G-7, not only within the G-7 but with other countries in the world including Australia and discussions with New Zealand and so on. This is a tremendous opportunity for Canada to take leadership with respect to mutual recognition of securities regulators and get a competitive advantage for Canada by taking that leading role.

Lo and behold, the SEC in the United States, because we have this plethora of securities regulators in Canada, decided to go ahead and have its initial negotiations preferring Australia over Canada despite the fact that we were the nation advocating the cause at the G-7. It is a great disappointment, quite frankly. I take no joy in this.

This is something that needs to be fixed and I look forward to discussing it further with my provincial and territorial colleagues over the next two days as we meet together in Montreal. Quite frankly, I think there is growing recognition among some of the provinces that this needs to be dealt with particularly in the area of enforcement.

When one looks at enforcement of securities regulation, money-laundering, anti-terrorist financing and so on, who is equipped to do that in Canada except the federal Government of Canada with the RCMP, CSIS, FINTRAC and so on. I hope we make some substantial progress going forward. I also look forward to receiving the report of the panel headed by the hon. Tom Hockin toward the end of this year. Then I look forward to moving forward on what is truly an important economic union issue for Canada.

[Business of Supply, May 28th, 2008]

Mr. Chair, there was great discussion and debate among the members of the O'Brien panel and of the Séguin panel, I am sure, when it was working on this issue about what one includes and what one does not include. Does one include hydroelectric resources? Does one include certain types of minerals and so on in terms of provincial revenues and the computation to arrive at fiscal balance?

At the end of the day it is fair to say that the O'Brien recommendation looked at a compromised position with respect to that issue and I think that compromise has, overall, been well accepted by other Canadian jurisdictions, as it was by the federal government.

[Business of Supply, May 28th, 2008]

Mr. Chair, in the budget this year, budget 2008, at page 70 there is a reference to this subject, which is as follows:

Budget 2008 reaffirms the Government's Speech from the Throne commitment to introduce legislation to place formal limits on the use of the federal spending power for new shared-cost programs in areas of exclusive provincial jurisdiction.

[Business of Supply, May 28th, 2008]

Mr. Chair, if I may, I will put things in a factual context. I am looking at page 224 of the budget document for this year, in 2007-08, the last fiscal year, cash transfers are at an all time high and have grown to almost 19% of total federal spending, their highest level in almost 30 years.

I must say that after we moved forward with the efforts we were making toward creating fiscal balance, the steps we took based on the O'Brien report were welcomed by the Government of Quebec and resulted in $8 billion through equalization, an increase of over 67% from 2005-06; $5.5 billion through the Canada health transfer, $2.5 billion through the Canada social transfer, as I say, an increase of $4.5 billion since the Liberal government of 2005-06.

The resolution of this issue has been accepted and welcomed in Quebec, no doubt because it benefits Quebec substantially.

[Business of Supply, May 28th, 2008]

Mr. Chair, as the member knows, ultimately our government decided to follow the recommendations of the O'Brien committee. They were not totally in line with the recommendations of the Séguin report and some would advocate that the Séguin report ought to have been followed. We chose to follow the recommendations of the O'Brien committee, which in fact had been appointed by the previous Liberal government.

It came forward with a principle based equalization program that we were able to implement.

[Business of Supply, May 28th, 2008]

Yes.

[Business of Supply, May 28th, 2008]

Mr. Chair, we may have some disagreement, but my understanding is the program that we brought in with respect to older workers accomplishes that goal. However, if the hon. member has other approaches and ideas that he wants to bring forward as we work toward the fall economic statement and the budget for 2009, then I am more than happy to consider them.

[Business of Supply, May 28th, 2008]

Mr. Chair, the issue mentioned by my hon. friend was referred to in the Speech from the Throne. That is the comment on behalf of the government relating to the spending power.

I should clarify that I do not have a pension, and I thank the hon. member for wishing me one. In fact, I was one of the persons in the Ontario Legislature who voted to abolish that gold plated pension back in the 1990s. I have no intention of losing my seat, however, so I hope to one day be entitled to a reasonable pension in this place.

The good news is that someone who does not need a pension, Sidney Crosby, has scored again, and I am told it is 2:0 Penguins.

[Business of Supply, May 28th, 2008]

Mr. Chair, it is precisely for those reasons, which my hon. friend raises, that we created the fund for older workers for workers between the ages of 55 and 62.

Indeed, it was his predecessor, as finance critic for the Bloc, who advocated strongly that we do just that a couple of years ago in our discussions before the budget at that time, and we did so. I would have thought the member would have applauded that advance.

[Business of Supply, May 28th, 2008]

Mr. Chair, there are two avenues for workers who lose their jobs, and one is retraining. We are spending a record amount for any federal government on retraining programs in Canada. It is accurate to say that any person in Canada who wishes to be retrained can get retrained and will be assisted in getting it. This is very important in a dynamic economy like Canada where there is change. For older workers there is that specific program to assist them to adjust.