Mr. Speaker, what a fine lead-in to my speech. I want to tell you at the outset that I am going to vigorously oppose this motion, which is against Quebec’s best interests. I want to tell you that I have listened to some of the speeches by my colleagues who spoke before me. I invite them to do the same, to listen to me, if they wish. If they want to talk, they can go outside the Chamber.
What struck me in their speeches is that at no time did an opposition member from the Bloc Québécois say what was good for business in Quebec. That is what is behind this motion. They have forgotten where the interests of Quebec businesses lie. The only thing they are thinking about is the Bloc ideology of a Quebec turned inward on itself and a regressive vision of Quebec.
I do not hold with that vision, I believe in an open and generous Quebec, a Quebec that takes its place in the Canadian federation and the world.
I have some names of companies that want to go on the Exchange: I am thinking of Rotobec, IPL, Prevost Car Inc., Exceldor, Côté, Knox, Poulies Maska, companies that need access to a capital market, a stable market. For that, they do business with financial institutions and the big banks. The other financial institutions, cooperative institutions, like the largest Canadian cooperative movement, Desjardins, have rules, and it is our role, as the government, to oversee them.
At the federal level, we have the Office of the Superintendent of Financial Institutions. That regulatory framework produces very good results, to the point that last week the 15th International Economic Forum was held in Montreal, with organizers that included Economic Development Canada, which provided financial support for that major global meeting. What did we see there? We saw the International Monetary Fund recognize that our financial system is one of the soundest on the planet.
Certainly we must not put our head in the sand and rest on our laurels. It is our responsibility to identify weaknesses in our system, to roll up our sleeves and work to improve it. One of the weaknesses in our financial system is that we have a system for securities regulation that is fragmented, that is divided among 13 different agencies.
Although the International Monetary Fund recognizes that we have a very sound financial system, the flaw it identified is our system for securities regulation. In that, it agrees with the large majority of observers, who recognize that the best solution lies in a single regulatory system that applies a single securities law. It must be agreed, we certainly do not set out to create crises, as is often the case with the Bloc, particularly in Ottawa, who love to create crises. That even seems to be one of their formulas for stirring the pot.
One thing that stands out as important, when it comes to creating the securities commission, is that we take a Canada-wide approach that respects jurisdictions and that is done in collaboration with the provinces. This is the complete opposite from what the Bloc Québécois is proposing and from what it has said this afternoon. It is a point of view shared by other provinces. In our 2009 budget, we insisted on the fact that we wanted to work with the provinces and territories on a Canadian securities regulator that respects constitutional jurisdictions. There is a difference between a Canada-wide commission and a federal commission that will respect regional interests and expertise. All the provinces are invited to participate in this transition toward a national securities regulator.
Some provinces have already supported this process. Ontario says that it would be important to improve the competitiveness of Canada's economy, but also, at the other end of the country, British Colombia recognizes how important it is to work together on this project. This province's finance minister, Colin Hansen, was quoted in the Vancouver Sun as saying that British Colombia “believe[s] that the objective of national regulation is the right objective”.
A national securities regulator would help give our companies greater access to a capital market. We hope that over the next few months, other provinces will work with us, will take the Canadian government's offer and will join in on the project, because during this economic recession we must take action that will give our manufacturing companies an advantage and make them more competitive.
As has been said, Alberta, Manitoba and other provinces have stated that a single regulator is not necessary because of the passport model. I am happy to talk about that this afternoon. First, I realize that it is a worthy initiative that has made it possible to reconcile regulatory differences and to harmonize and simplify securities laws. The initiatives are important to increase the efficiency and effectiveness of Canada's regulatory system.
Through these initiatives, the provinces have indicated that they wanted to work together, respecting all jurisdictions, as part of a clear commitment to improve our securities regulatory system.
Even though those initiatives are laudable, they do not go far enough and fast enough. We must take one more step. In fact, with the passport system, which is a move in the right direction, we still have 13 sets of laws, 13 types of legislation and 13 organizations, all for one country.
That does not serve the Canadian market well. It is a well known fact that companies in Quebec, Manitoba and the Maritimes are often small companies and the regulatory inefficiencies hit them relatively harder because the relative costs to access new markets are higher for them. The passport system limits the capacity of small and medium-sized companies to exploit the possibilities of all the financial markets in Canada. Moreover, that structure imposes high costs on them.
In its presentation to the expert panel on securities regulation, the Canadian Bankers Association insisted on that. The association pointed out that if these companies tried to raise capital in 13 jurisdictions instead of just one, the costs associated with regulations would double to 16% of capital for a business that wanted to raise $1 million. A company must therefore spend $160,000 on red tape to raise $1 million. That is the situation now. That is 4% for a company that needs $10 million. That hurts our small manufacturing companies that look for capital in a larger market. That is what we should remember when we analyze legislation adopted here in Ottawa in the interest of Quebec and of all Canadians.
Businesses in other countries do not have the same kind of burden, which puts Quebec companies at a competitive disadvantage on today's world markets. It is here, in Ottawa, that we can take concrete measures to help Quebec companies.
Janet Ecker, president of the Toronto Financial Services Alliance, said that at a time when the entire international financial system is engaged in a race to create co-ordinated, standardized regulatory systems, we cannot even create a national system. She said that if Canada wants to be taken seriously on the international financial stage, it has to have a national system. Our colleagues in the Bloc obviously do not care at all about Canada’s competitiveness on the international scene because they are so busy trying to isolate Quebec by separating it or fomenting political crises.
According to Bloc ideology, the European common market is often seen as a beautiful utopia. In actual fact, the Europeans are trying to harmonize their sovereign countries and lower tariff barriers. We are currently negotiating with them because we want to open our markets. We know that this is what enabled Quebec businesses, under a Conservative government, to access the U.S. market and markets throughout the world. Their pork is exported to Mexico and their aircraft to China, for example. People realize that we need to standardize our ways of doing things, rather than erect barriers. We need to lower the barriers around Quebec, rather than raise them.
What is important is to have a Quebec that is open to the world and able to do business, and that goes through Ottawa, through federal legislation that is suitable, respects the various jurisdictions, and takes Quebec’s interests into account.
What the passport system lacks is a national mechanism to coordinate law enforcement. As a result, it is hard to get maximum benefit from this crucial aspect of the system.
This defect was highlighted by the Royal Bank in its submission to the expert panel. Its representatives stated that, as a result of insufficient resources and the difficulty of co-ordinating investigations among a host of different agencies, compliance with the securities legislation in Canada was perceived as slow and most effective when non-compliant parties declared their violations on their own.
This perception hurts Canada when it comes to the enforcement of the regulations. Trade can easily move to other countries and capital raised there if law enforcement here is perceived as lax.
This is also important for Canada on the national scene. The International Monetary Fund recognized that Canada is one of the engines of the G20 and helped institute the measures that are enabling the global economy to emerge from the crisis. It is important, therefore, for Canada to be able to play a leadership role as well on international financial markets.
According to the Investment Industry Association of Canada, which is a national sectoral association, this failure is costing us some fine opportunities. The IIAC says that our process for approving new products and new rules and market structures is obsolete because it requires a consensus resulting in long delays.
It is important therefore for Canada to be one country with mechanisms to ensure that capital can circulate adequately within it and without barriers to overcome every time a business person wants to access capital from another province.
A Canadian securities regulator would not only increase Canadian markets' competitiveness, but would facilitate the development and marketing of new financial products, and the adjusting to the evolving international situation. And this is precisely the most interesting aspect for Quebec businesses.
Some also claimed that a Canadian securities regulator would be a centralized body that would not take into consideration regional specificities. It is our role as parliamentarians, here in Ottawa, to ensure that this Canada-wide body reflects regional disparities and interests. For example, we can think about investors from the Atlantic region, who do not necessarily want to come to Ottawa, or to Toronto, to do business. In the study that was conducted, the transition office said that the regulator would have a regional specificity. Let me explain.
In its report, the expert panel recommends that regional, provincial and local offices be maintained, and that these offices “would support implementation measures taken locally, would serve as contacts for complaints regarding faulty actions of a regulatory nature, and would provide general services to meet the needs of participants in local and public markets”.
The media reported that those opposed to a Canadian securities regulator claim that it would not take into consideration the specific sectors of each province. It is just the contrary. Indeed, the transition office precisely hopes that the regulator will cooperate with the provinces to establish a Canada-wide market.
The expert panel recommends that local offices be maintained in certain regions of the country to deal with these specialized markets. The report points out that British Columbia could specialize in the mining sector, Alberta in the oil and gas industry, Ontario in the financial service sector, and Quebec in derivative financial instruments.
The Montreal Exchange, which has already developed a specific niche in derivative financial products, immediately comes to mind. We would simply want to concentrate all these activities in Montreal, Quebec, for the whole country. This means that Quebec would manage all financial instruments derived from securities, and we know that there is a huge potential for growth in this area. In other words, Quebec would manage that specific area for the whole country.
As we can see, it is important, in the implementation of this Canada-wide system, to take our rightful place, so that Quebec can fully assume its role and benefit from it.
At first, the staff of regional and local offices should include mostly employees from existing provincial regulators. We must recognize the excellence and skills of those who provide similar services in all the provinces, and particularly in Quebec, and we must keep these regulatory skills and provide uninterrupted regional and local services.
By having decentralized offices with such regional specificities, this system, by its very nature, takes into consideration our country's specificities and can thus become an excellent tool indeed to establish a single system across the country and to allow businesses to have access to a service that is geared to their needs when they go to an office.
As I mentioned, the current recession was triggered by systemic problems in the financial structure. In recent months, Canada and its G20 partners have been working very hard to restore financial stability throughout the world. However, the international community continues to feel the effects of this financial crisis. Canada, like all the other countries, has learned that a systemic risk can come from any part of the financial services sector, and not only from the banking sector. So, we are talking about the financial market.
The Bloc members unfortunately voted against Canada's economic action plan, and they said they were going to vote against the spending estimates on Friday. They would rather go to the polls and hand out pamphlets at the Old Orchard campgrounds and beaches than invest money in getting our economy moving and creating jobs. That is a fact.
Our government's economic action plan included a series of measures to bolster financial stability, including increased powers for the government and the Canada Deposit Insurance Corporation and the creation of an office to facilitate the transition to a Canadian securities regulator for participating provinces and territories. We are therefore making structural investments to eliminate and break down barriers so that Canadian companies can have broader access to more capital.
Bringing all the financial regulation stakeholders together at the same table will improve policy coordination and make Canada's regulatory framework more responsive to global challenges. It will make us better able to identify emerging risks and to work together to mitigate them.
Far from being an intrusion into a provincial jurisdiction—I explained that we are working with respect for jurisdictions and in a way that puts companies first—the creation of a Canadian securities regulator is a giant step for Quebec's and Canada's financial markets and investors. Everything is being done with respect for jurisdictions, regional interests and expertise. This is a concrete example of a Quebec that is developing and playing its role within the Canadian federation in a united Canada.
