Quebec’s minister of finance is stepping up his criticism of the federal government’s efforts to create a national securities commission.

Finance minister Raymond Bachand says that the federal government’s arguments in favour of the new body are “as weak as they are debatable”, and that they “denigrate the existing, perfectly functional pan-Canadian system.”

“The OECD ranks Canada second in the world for the quality of securities regulation while the World Bank ranks it fifth for the quality of investor protection, even ahead of the United States,” Bachand notes.

“Judging from international organizations’ positive assessment Canada’s financial system, the case can be made that the provinces are carrying out their responsibilities within their constitutional powers very well. Quebec consumers, like those of other provinces, will never be better protected than by a provincial commission, connected to their situation and working with its colleagues.”

Bachand disputes the assertion that the current Canadian system leads to higher capital costs, arguing that several studies show that these costs are equal, or lower than in the United States.

He criticizes the idea that enforcement would be improved with a national commission, particularly the use of the recent Earl Jones scandal to foster support for a national commission.

“Earl Jones was not registered and the authorities became aware of the nature of his activities only once his victims discovered they had been cheated and complained to the authorities. What more could a centralized securities commission, whose head office would not even have been located in Montréal, have done?” he says. “I find it irresponsible to make people believe that a federal commission would have protected these unfortunate victims from the fraud committed by Earl Jones.”

Finally, Bachand scoffs at the idea of a national commission created on a voluntary basis by willing provinces. “Let’s assume that many provinces and territories refuse to join the centralized federal commission, which in the present context is very likely. We will end up with several commissions dealing with each other using a passport system. But such a system already exists in Canada and Minister Flaherty accuses it of being ineffective,” he says.

IE