Mr. Speaker, I appreciate the opportunity to respond to today's motion, if only to once again deconstruct the Bloc's misguided opposition to our efforts to improve market regulation.
Reading the motion, I am left with the conclusion that the Bloc is blissfully unaware of the global economic crisis and has no clue what must be done to ensure that Canada's financial system continues to rank as the world's best. Given the synchronized global recession, our government believes that we must modernize our securities regulatory framework to protect our economy and the jobs that it creates. We believe that this is a priority, especially during these difficult economic times.
Unlike the Bloc, we have a very good understanding of economic issues. I remind the House of the troubling words of Caroline St-Hilaire, the prominent former Bloc MP from Longueuil—Pierre-Boucher, who resigned her seat in the last Parliament. She said:
The economy is constantly a black sheep for [the Bloc]. We are profoundly uncomfortable when it comes to discussing the economy.
Canada's financial system has shown exceptional stability throughout this crisis and has been a global benchmark for best banking practices. We are the new gold standard thanks to consecutive governments. Our system has recently been rated the soundest in the world by the World Economic Forum. President Barack Obama has heralded it. He noted:
--in the midst of this enormous economic crisis, I think Canada has shown itself to be a pretty good manager of the financial system in the economy--
However, the current financial and economic turmoil has highlighted a clear deficiency in the Canadian framework of securities regulation. Canada's security regulation framework urgently needs reform for several reasons. Financial activity is now global and Canada's system must be prepared to regulate the Canadian markets nationally while cooperating with foreign regulators. Canada must also be in a position to promote its interests in the setting of international regulatory standards.
As a recent Toronto Star editorial noted:
Given today's global financial crisis, a national securities regulator may just be an idea whose time has finally arrived in Canada.
A national securities regulator would be in the best position to ensure consistent regulatory quality across Canada and to represent our interests in bilateral and multilateral negotiations on financial standards. Canada deserves to have the ability to more effectively coordinate its actions with that of the international community.
Recently, this point was emphasized at the House of Commons finance committee, of which I am a member. The Investment Counsel Association of Canada testified:
The problem with the Canadian securities regime and why we stand out...is that there hasn't been enough enforcement...it's harder to coordinate when you have 13 different groups and national firms.
Canada is the only industrialized country without a national securities regulator. The current system is cumbersome and fragmented, something even the Liberal member for Wascana, when he was ever so briefly serving as finance minister, quickly realized. He publicly stated that Canada's regulatory framework was “largely fragmented and certainly less sophisticated than that in virtually every other country in the world”.
Indeed, due to its fragmented nature and the need to coordinate decisions across the 13 jurisdictions, it is difficult for Canadian securities regulators to react quickly and decisively to capital market crises. When countries around the world restricted the short selling of certain financial stock as a temporary stability measure during last fall's financial meltdown, Canada's response lagged behind. It is unsettling to witness a coordinated response from countries while there was no coordinated response from within Canada.
Our system of provincial mandates is not congruent with the national response required to address capital market events that are increasingly national or global in scope. It is highly unlikely that multiple securities regulators within Canada will be able to work effectively as part of a national risk management team with its global partners in a timely and decisive manner.
Without question, this will have a detrimental effect on the integrity of Canada's capital markets.
As an editorial in Canadian Business magazine noted:
When it's wrong, it's wrong. That is the only way to describe Canada's patchwork system of provincial securities regulators... There is nothing good about the status quo. Standing out on the world stage can be a good thing, but not when a nation stands out for having 13 securities acts and securities regulators.
Our Conservative government believes that we must act now more than ever to modernize our market regulatory framework to both protect our economy and allow Canada to quickly and decisively react to market events. Since 2006 our Conservative government has been working aggressively to make that happen.
This is not about Bay Street at the end of the day. It is about Main Street.
We are an investing country. Canadian workers, families and seniors invest in RRSPs, tax-free savings accounts, stocks, mutual funds, or are covered under pension plans. These nest eggs represent Canadians' financial future. These nest eggs that represent so much to Canadians are becoming increasingly complex. Canadians deserve the strongest possible regulatory protection for those nest eggs for the future. That is their family's future and their children's future.
That is equally important for Canadians regardless of where they live. It is important in Quebec. It is important in Alberta. It is important in Ontario. It is important right across this wonderful country, and that is the point.
Some have suggested the passport system is the answer, not a national regulator. We respectfully and strongly disagree.
With the passport system, Canada still has 13 securities regulators with 13 sets of laws and 13 sets of fees. What is more, the passport system lacks national co-ordination of enforcement activities, making it difficult to maximize results for this critical part of the system. This is not only inefficient, but it also means some investors and some provinces are better protected than others.
I would suggest that this is in itself inconsistent with the Canadian value of fairness. I would point to the Canada Health Act. I would draw the attention of my colleagues in the House to our commitment to equalization.
The passport system does not meet the longstanding goal of providing Canadians equality regardless of the province in which they reside.
As the Canadian Bankers Association points out:
The passport system is only a second-best solution. All of the same infrastructure costs and fees of the current fragmented regulatory system remain in place, entrenching a potentially confusing and inefficient enforcement mechanism. A Vancouver Sun editorial echoes that sentiment noting that, “The passport system is a poor second-best to a national regulator”.
Canada and its economy deserve better than second-best, especially now. The stakes are too high and the risks are too great to accept anything less.
The purpose in creating a national securities regulator is not to create another bloated bureaucracy in Ottawa, but to work with and for our provincial partners to make Canadian markets work better and move with more confidence.
Why is that important? Better markets will allow more companies to seek more investors, allowing more companies to create more jobs for more Canadians. If the current global economic crisis has taught us anything, it has highlighted how important healthy capital markets and effective regulation are to our prosperity.
A Canadian securities regulator with a clear financial stability mandate would help provide national accountability, reduce overlap and duplication, strengthen enforcement, and better serve the needs of investors. The Bloc does not get that, and that is too bad.
We think Canada deserves the best and we are going to make that happen. That is why we are introducing legislation based on recommendations of the Hockin expert panel on securities regulation in Canada. That is why we are working in collaboration with the provinces and territories as we move forward on this important initiative.
The 2009 Budget Implementation Act, already adopted this past March, provides the legal authority for the establishment of an office which will lead the transition to a Canadian securities regulator and the development of an implementation plan.
The Bloc should also be aware that support for a national securities regulator exists within Quebec. As the Montreal Gazette so aptly put it just this past January:
The federal government should remain on course and move ahead forcefully to get a national securities regulator up and running.
It's absurd, in an era of unprecedented anxiety about all things financial, that 13 different agencies, one in each province and territory, regulate the trading of stocks and bonds and the like in Canada. Around the world there's a serious move afoot to monitor and control companies in this industry in a coordinated international fashion. Yet in Canada, each province still sets - and enforces, more or less - its own rules.
Stephen Jarislowsky, the founder of Montreal investment management firm Jarislowsky, Fraser Limited, said, “A national regulator would be an excellent thing”.
To recap, Canada has a strong financial services sector, one that spans the country from coast to coast to coast providing good high-paying jobs for Canadians. While Canada's financial system has been judged as the soundest in the world, our system of 13 regulators is cumbersome and fragmented. It lacks the proper tools of enforcement.
The benefits of having a Canadian securities regulator in Canada are obvious and accepted, including contributing to the financial stability of Canada's financial sector, providing clearer accountability and more responsive decision making in a rapidly evolving capital market, strengthening Canada's capacity to work with international partners to improve the efficiency of global capital markets for the benefit of Canadian investors and businesses, as well as strengthening enforcement and the fight against white collar crime, and also providing Canadian retailers with wider access to investment products, and making it easier and less costly for Canadian entrepreneurs and businesses to access money from investors across Canada and around the world.
Contrary to the Bloc's assertion, a national securities regulator is not an intrusion of any kind. It is a voluntary initiative. As stated in Canada's economic action plan, our Conservative government has pledged to work with willing partners to establish a Canadian securities regulator that respects constitutional jurisdiction, regional interests and expertise. All provinces and territories are invited to participate with us. Already a critical mass of provinces and territories, including British Columbia and Ontario, have indicated their willingness to participate in the establishment of a Canadian securities regulator.
This is about co-operation, not about jurisdiction. It is about establishing a Canadian securities regulator that will provide clearer national accountability, reduce overlap and duplication, strengthen enforcement, better serve the needs of investors and contribute to the stability of Canada's financial sector.
We owe it to Canadians to put in place a system that better protects their savings. What is more, the evidence suggests that for the most part the political will is present to accomplish this landmark achievement in this Parliament.
The Liberal Party of Canada has long supported the move to a national regulator, especially prominent Liberals such as the current finance spokesperson, the member for Markham—Unionville, as well as the member for Scarborough—Guildwood, who, by the way, was the last Liberal parliamentary secretary to the minister of finance, as well as the member for Wascana, who was the last Liberal finance minister. Indeed, let me quote the member for Scarborough--Guildwood who remarked in this chamber only a few months ago:
We have 13 separate regulators in 13 separate jurisdictions doing, Lord knows, what all.... We think there should be a national securities regulator. The measure provided by the government is a sensible approach to what is a fractured system.... [T]his is a step in the right direction.
This is also an issue upon which even the NDP should be in agreement. We might think that such support would be a given seeing as we have heard strong support from unions like the Canadian Labour Congress, the National Union of Public and General Employees and CUPE.
The NDP caucus chair and the former NDP finance critic, the member for Winnipeg North, called this a worthwhile goal. Even the NDP leader just this past January in a speech to the Toronto Board of Trade said that he would like to see us moving toward national securities regulation.
However, it appears the member for Outremont, perhaps in an attempt to undercut the current NDP leader, has battled his own party and is attempting to shift that party's position. It appears that he wants to be in lockstep with the Bloc and advocates weaker protection for Canadian investors through maintaining our current patchwork approach. I would like to draw the attention of the member for Outremont and his NDP colleagues to the voices of organized labour in this country, like the National Union of Public and General Employees, which recently pronounced:
Canada is the only member of the Group of Seven industrialized nations without a national securities watchdog. It has a dismal reputation at home and abroad in dealing with corporate crimes and wrongdoing.... The issue is important to workers because so many depend on sound financial markets to ensure healthy pension funds.
While speakers may follow after me, this debate is, for all intents and purposes, long over. Canada deserves the best. Canadians will get the best. A national securities regulator will be a reality shortly.
