Single securities regulator bad for Quebec: group
A single national securities regulator threatens thousands of Quebec jobs and weakens the province's economic development, a newly formed coalition of Quebec's business leaders warned Monday.
They urged Ottawa to back down on its plans as Finance Minister Jim Flaherty said he was just weeks away from completing the legislation creating the new entity.
"There's still time for Flaherty and [Prime Minister Stephen] Harper to change their minds," Quebec Finance Minister Raymond Bachand said at a news conference.
"What the Quebec business community is telling Ottawa today and the rest of the country is that this is not a decision in the interest of the country."
Quebec's fight against the federal proposal has received the backing of Quebec-based companies Cascades Inc., Jean Coutu, and Quebecor, along with the Caisse de dépôt et placements du Quebec, the chamber of commerce and employers' group Le Conseil du Patronat.
'This is an international embarrassment to Canada which otherwise has a very strong brand in financial institutions and regulation around the world,' —Federal Finance Minister Jim Flaherty
The Desjardins Group, Quebec's largest financial group, isn't an official member of the coalition, but said it supports its objectives and hopes further discussions can lead to a workable compromise.
Bachand said centralizing decisions would immediately shift 500 to 1,000 high-level jobs to Toronto. It would be followed by a gradual move of supporting lawyers, accountants and tax specialists.
A study prepared by consulting firm Secor said there are 300,000 direct and indirect financial sector jobs in Quebec, about half in Montreal.
It found that creating a national securities regulator with headquarters in Toronto would "deprive Quebec of an important support for its economic development."
Weakness: Flaherty
In Halifax, Flaherty said he's aware of Quebec's concerns, but studies have consistently shown that having 13 regulators instead of one adds to costs.
He said the one glaring weakness of the Canadian financial system is that there are so many regulators for a country with just 34 million people.
Canada is the only country in the G20 without a national securities regulator.
"This is an international embarrassment to Canada which otherwise has a very strong brand in financial institutions and regulation around the world," he told reporters.
But the Alberta Securities Commission called criticisms of the current system unfounded.
"To the contrary, the efficiency and effectiveness of the securities regulator regime in Alberta will be substantially diminished by a national regulator," spokesman Mark Dickey said.
Bachand said a centralized regulator would weaken Quebec's financial sector and eventually encourage a further movement of corporate head offices to Toronto. Montreal suffered a dramatic shift in the late 1970s after the Parti Québécois first came to power.
'It's project that is for Toronto, done for Ontario and in the interest of Toronto,' —Quebec Finance Minister Raymond Bachand
The minister said all big regulatory decisions would be made outside Quebec by people who won't be "sensitive to the particularities of Quebec companies."
"It's project that is for Toronto, done for Ontario and in the interest of Toronto," Bachand added, noting that Canada's five largest banks are located the country's largest city.
The Canadian Bankers' Association said Monday that Canada's system is out of synch with other countries around the world, which puts Canadian businesses at a disadvantage.
Supporters of one national regulatory body also say it would be a better watchdog against white collar crime because it would have more resources.
But Jean St-Gelais, head of the province's securities regulator, the Autorité des marchés financiers, countered that a centralized regulator wouldn't do any better job of investigating or prosecuting cases.
He also questioned whether a centralized system would have ensured that Montreal be the centre for Canadian derivatives during the merger between the Toronto and Montreal stock exchanges.
Flaherty said last week that legislation creating a regulator would be ready within weeks and could be running in three years. It will be referred to the Supreme Court for an opinion on whether
Ottawa has the constitutional power to enact such legislation despite provincial objections.
Holdouts such as Quebec and Alberta would be able to retain their existing systems.
The issue will also be heard by courts in Alberta and Quebec, where the provinces have challenged Ottawa's authority to intervene on what they believe is provincial jurisdiction.