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BLOC QUÉBÉCOIS DISSENTING OPINION

Finance Committee Report

White Paper on the 1997 Review of Financial Services Legislation

INTRODUCTION

The Bloc Québécois disagrees completely with several of the recommendations included in the Finance Committee majority report arising from the White Paper on the 1997 Review of Financial Services Legislation. This report shows once again that, as far as the federal government is concerned, simplification and duplication are synonyms, and harmonization means interference.

Our main objections concern the establishment of a national securities commission, as well as the interference in an area of provincial jurisdiction that is exemplified by the establishment of a federal consumer protection bureau.

THE ESTABLISHMENT OF A NATIONAL SECURITIES COMMISSION

The introduction of a national securities commission would be an unprecedented intrusion into an area of exclusive provincial jurisdiction. The federal government would be appropriating for itself a significant economic lever, and this would be to Montreal's detriment, since the national commission would be located in Toronto.

The Commission des valeurs mobilières du Québec or CVMQ [Quebec securities commission] accounts for more than 120 direct, permanent jobs and more than 15,000 stockbrokers and securities advisers are listed. Its budget totals slightly more than $8 million, and it clears more than 1570 prospectuses for distribution each year. In 1995, the Montreal Stock Exchange traded a volume of 2.9 billion shares with a total worth of nearly $39 billion. The establishment of a national securities commission would cause significant injury to the CVMQ, as it would drain the best stockbrokers, advisers, lawyers and financial analysts out of Quebec to Ontario.

The Liberals are trying to set up a national securities commission solely to respond to political pressure from financiers in Toronto, as there is absolutely no justification for the establishment of such a commission. There is in fact a viable alternative, which consists of completing the implementation of the System for Electronic Document Analysis and Retrieval (SEDAR), which was designed and perfected by the provincial securities commissions. Using this system, a business executive wishing to issue securities in several provinces at once would only have to go to one place to submit the prospectus in each of those jurisdictions.

The Liberal argument that the provinces would not be obliged to participate in a national securities commission and that they would be able, therefore, to keep their own provincial commission, is a line of reasoning that is beyond all understanding. We all know that if a national securities commission is set up, it will in reality prevail over the provincial commissions, and the upshot will be the same: the demise of the provincial commissions and a mass departure of the best people in financial sectors across the country to Toronto.

Consequently, it is out of the question for the Bloc Québécois to allow the federal government to promote such a plan. It would be an intrusion into an area of provincial jurisdiction that would sound the death knell of the Montreal economy.

FEDERAL CONSUMER PROTECTION BUREAU

The federal government claims that it wants to reduce overlap and duplication, even though its White Paper and the Liberal majority report are crammed with measures that increase the duplication. A telling example of this is the establishment of a federal consumer protection bureau.

The Bloc Québécois is not opposed to measures to protect personal information about individuals. However, we must point out that there is already legislation to this effect in Quebec: we have legislation on consumer protection, protection of personal information, insurance companies, trust companies and savings, credit and securities institutions, and there will be legislation on the allocation of financial products and services. The establishment of a federal consumer protection bureau is likely to create new areas of regulatory overlap with the measures already in effect in Quebec in this area, which is, after all, an area of provincial jurisdiction.

Furthermore, in establishing a "Consumer Protection Bureau ... to receive and report to Parliament on complaints regarding privacy violations and tied selling" (majority report, page 5), the federal government would only be magnifying the problems it claims it wants to resolve. Customers will be asked to inform on their bank manager or any other employee at their financial institution if their personal information has not been adequately protected, which would put all the pressure on the victims, not on the guilty parties. It is unlikely that many people would dare to file a complaint, as there would be too much at stake.

The Bloc Québécois therefore asks the federal government not to keep on interfering in areas of provincial jurisdiction with the establishment of a federal consumer protection bureau.

FOREIGN BANK ENTRY REGIME

A foreign bank is permitted to provide services in Canada only through its subsidiaries, which are federally regulated financial institutions, except when it is involved solely in securities transactions. In this case, it could operate in Canada through a stockbroker. However, in order for this stock brokerage subsidiary to begin its activities, the foreign bank will have to obtain the agreement of the federal Finance Minister, even though securities come under provincial jurisdiction! The Bloc Québécois asks that this situation be remedied in a manner that acknowledges that this is an area of provincial jurisdiction.

CONCLUSION

The 1997 Review of Financial Services Legislation is a crucial exercise in which the Bloc Québécois is participating conscientiously and in good faith. We regret to say, however, that the federal government is using this opportunity to continue its interference in areas of jurisdiction that are vested in the provinces while at the same time talking endlessly about decentralization and simplifying the government bureaucracy. This exercise offered further proof that we cannot believe in the federal government's commitment to eliminating overlap and harmonizing its practices with those of the provinces. Whenever these promises are kept, it is to the detriment of the provinces, which must give way to an increasingly centralizing government.

Therefore, the Official Opposition asks the federal government:

1) to abandon its plan to establish a national securities commission;

2) to allow the provinces to manage consumer protection, since this responsibility does belong to them; and

3) to allow provincial jurisdictions to decide whether to allow foreign stock brokerage subsidiaries to operate on their territory, as this is an area of exclusive provincial jurisdiction.

Yvan Loubier, M.P.
St-Hyacinthe-Bagot

Richard Bélisle, M.P.
La Prairie

Yves Rocheleau
Trois-Rivières