A tiny bit of progress should be noted at the Commons finance committee in the otherwise circus-like atmosphere of Parliament Hill in the past month.
Members of Parliament from all parties began hearings on the plight of small, retail investors stuck with frozen asset-backed commercial paper. It is doubtful that the MPs can do anything beyond making the right sympathetic noises to relieve the ABCP victims’ plight.
But the fact that the MPs are even talking about this issue represents progress. In the past, both the federal government and the Opposition have been indifferent to the plight of holders of Canadian securities, big or small. After all, securities trading, like used-car lots, is a provincial responsibility.
History will probably note the supreme irony that, while MPs of all parties were gnashing their teeth in the past decade about $1.50 service charges at ATMs, no one on the Hill seemed to give a tinker’s damn about Nortel Network Corp.’s accounting or the Bre-X Minerals Ltd.’s gold mining fraud.
Although the Opposition was demanding in the dying days of the Liberal dynasty to get to the bottom of the sponsorship scandal, which involved a relatively small few million, they were strangely indifferent to the billions and billions of dollars in retirement savings that evaporated in the fallout from the Nortel accounting scandal.
The empathy of provincial legislators hasn’t been much better. After all, there were Canada’s 13 securities commissions to look after stuff like that. A provincial legislator has to worry about grants to community centres and other things that play well on Main Street. Indeed, about the last thing a Canadian politician has wanted is to be seen as a champion of Bay Street or any of its practitioners. That’s because there has been little to be gained by government and Opposition politicians by looking out for investors or financial markets.
But with retired boomers and other small investors increasingly winding up as roadkill on financial highways, watch for a paradigm shift in the business of retail politics. Now we have an issue with a measurable voter yield, as they say in the politics biz.
Perhaps this is why Finance Minister Jim Flaherty, who knows a thing or two about retail politics on Main Street, has been busy hammering the provincial securities commissions over the ABCP mess every chance he gets. (Memo to the minister: the Office of the Superintendent of Financial Institutions is a federal agency reporting to you, sir, respectfully submitted, etc. etc.)
There is a very good chance the finance committee will recommend a national securities regulator, to Flaherty’s delight, with the Bloc Québécois writing a minority report. That document will defend the Quebec securities regulator’s right to exist and blame everything on Flaherty, of course.
Another development that will probably renew Flaherty’s interest in a national regulator is the U.S.’s decision to spurn Ottawa’s overtures for free trade in securities because of Canada’s lack of a national regulator. Instead, the U.S. signed a deal with Australia, which does have one, and dismissed Flaherty like he was the mayor of Whitby or some provincial wannabe.
But all those on Bay Street who have been arguing for a national regulator for all these years should take heed. Changes in the political climate will mean the politicians will make protection of small investors the major priority of a national regulator, as opposed to Bay Street’s priorities of efficiency and harmonized rules. As a result, Bay Street should be looking to do some serious issues management.
In a previous column, I singled out the finance committee for submitting its pre-budget report just two weeks before Budget Day, thereby highlighting the sad state this once-influential body is in. I stand by that assessment. But it is nice to see this committee taking initiative again.
The same, however, cannot be said for the overall state of parliamentary committees, mainly because the government seems hell-bent on undermining them. Most recently, the Harperites pulled the plug early on the proposed sale of MacDonald, Dettwiler & Associates Ltd., even though two committees, industry and foreign affairs, were still examining the deal.
The health committee has been studying post-market surveillance of pharmaceuticals for several months. But before this committee could report on how to protect patients against flaws not caught in clinical trials, the Harperites introduced a new regime of speedier drug approvals. This was hidden inside consumer safety legislation inspired by defective Chinese-made toys.
@page_break@We have the spectacle of Art Hanger, chairman of the justice committee, walking out on his own committee several times to thwart investigation of the Chuck Cadman affair. Then the Tories had the gall to suggest an election might be needed because the Opposition is abusing the committee process.
Parliamentary committees provide the vital link between Canadians and the parliamentarians they elect. Undermining them is undermining parliamentary democracy. Canadians should be thinking beyond reduced sales taxes on a widescreen TV and worry about the health of their democracy. IE
Feds step up efforts to protect investors
The fracas over ABCP losses might even jump-start the creation of a single securities regulator
- By: Gord McIntosh
- April 29, 2008 October 29, 2019
- 09:52
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