|Speech by Senator Pamela Wallin to the Regina & District Chamber of Commerce|
January 12, 2011
Speech by Senator Pamela Wallin to the Regina & District Chamber of Commerce at the Conexus Arts Centre,
A National Securities Regulator: Why it's important for Saskatchewan and Canada
- As delivered
Thank you *** And good afternoon everyone!
It is such a pleasure to be here in
I was home for Christmas, driving up highway 35 from
I am so proud to be a Senator representing
But we know something else about this province. Something more important.
As a daughter of
I cherish the
Above all, I am proud of our passion for creating a vision of what can be. Of building for the next generation. Leaving this land better than we found it.
I thought about this legacy as I focused on the issue I’d like to talk about today - a national securities regulator - because it really represents something so key to what
It’s about building on what we’ve created together. It’s about looking outward, confidently, to international markets. Strengthening businesses. Protecting investors. Lowering barriers for investment and investors! And positioning ourselves for success.
Brad Wall went to
You see, during my time as Consul General in
We are their best friends whether they know it or not – and we are their best friends whether we like it or not! Americans are benevolently ill-informed about
But working so close to Wall Street, I learned that when many American investors look to
And for many American companies, it’s just not worth the effort. And so they invest elsewhere, where there are fewer hurdles to clear, fewer hoops to jump through.
The fact is that in today’s world of interconnected capital markets, where investors can move billions of dollars at the click of a mouse, we need to reduce barriers, not multiply them. Make it easier to invest here, not harder. And that’s why we need one regulator, not 13.
The current system creates overlap and duplication - and that adds expense. And for investors, there’s unequal protection - and that adds risk.
Again and again, I was asked why
The fact is that international organizations have identified this as a key flaw in the Canadian financial system - one of the few, as we today are the envy of the world for the stability of our financial sector! The Organization for Economic Cooperation and Development has said …the situation “increases the risk that firms will choose to issue securities in other countries. A single regulator would eliminate the inefficiencies created by the limited enforcement authority of individual provincial agencies.”
The International Monetary Fund sounded a similar warning when it said that, “A federal regulator could coordinate more readily with other regulators in monitoring risk and responding quickly to a crisis and could also have an enhanced focus on the issues that security markets may pose for national financial stability.”
Now, as you know, the idea of a national securities regulator is not new. It goes back at least as far as 1935 when the Royal Commission on Price Spreads – yes, we had such a thing - recommended the creation of a national securities board.
More recently, in 2003, we had the Wise Persons Committee, which was so ably co-chaired by the distinguished
“(I)nsufficient resources are directed towards enforcement. Wrongdoers too frequently go unpunished and adjudication is unduly delayed... There are disparate priorities and a lack of uniform investor protection. Policy development is characterized by compromise and delay...
I don’t know about you, but I get the impression they weren’t too impressed with the current securities system!
In 2008, an Expert Panel on Securities Regulation was appointed, headed by the Honourable Tom Hockin. Its main recommendation? To create a single Canadian Securities Regulator.
It seems that generation after generation, government after government, have studied this issue and come up with similar conclusions - the present system is broken and needs fixing. But nothing ever came of it. Governments of every political stripe simply kicked the can down the road, unwilling to either pay the price or do the work required.
Well, with the current federal government, that finally changed. Finance Minister Flaherty declared that enough was enough, the buck had to stop and it was stopping with him.
And so, in July 2009, the Government established the Canadian Securities Transition Office, with a mandate to lead the transition to a Canadian Securities Regulator, including developing new legislation - The proposed Canadian Securities Act. By May of 2010, the Transition Office had drafted the Act and the Government referred it to the Supreme Court of Canada for its opinion.
This reference should confirm that the proposed Act is within the legislative authority of the Parliament of Canada and provide much-needed certainly for all concerned - provinces and territories, market participants and individual investors.
Once the Supreme Court has ruled, the government is confident the way will be cleared to have the kind of securities regulation
One system - with one set of rules. Reducing overlap and duplication. Providing simplified and consistent national standards. Resulting in greater clarity for businesses and new tools for supporting the Canadian financial system.
And for investors, large and small - better protection against the kind of fraud and abuse that’s been so much in the headlines over the past few years.
I was always struck, when I was in
Some have argued that the Canadian Securities Act simply replicates what the provinces already do in terms of enforcement - but that’s not the story! What it does is keep the best elements of provincial securities law while going much further to protect the savings of Canadians.
There will be improved regulatory and criminal enforcement to more effectively fight securities-related crime. And those who commit securities fraud will face a tougher, more comprehensive regime. No more falling through the cracks, no more checkerboard protection for consumers.
The proposed national regulator will do something else as well - it will make it easier for small and medium-sized businesses to get access to capital not just here in this province, but across the country. And that’s good news for the farmer with a business in Wadena, the family business in North Battleford and the entrepreneur here in
Finally, the new securities regime will enable
Of course, a more unified approach to financial sector regulation is nothing new to this province. The Saskatchewan Financial Services Commission was created back in 2003, integrating the three major organizations that regulate financial services in this province - the Saskatchewan Securities Commission, the Financial Institution Section of the Consumer Protection Branch and the Pension Benefits Branch of the Saskatchewan Department of Justice.
Janice MacKinnon, in her recent article, makes a very important point: be at the table early to influence the decisions and establish a niche of expertise that can be located here in the province!
Of course, any time a new national institution is being created, there is understandable concern that regional voices be heard and regional interests represented. The Government of Canada has been sensitive to that from the get-go. They invited all thirteen provinces and territories to participate in the transition planning process. So far, ten have agreed to do so and together they act as an advisory committee to the Transition Office.
I’m proud that
I don’t need to tell you that this province has become what the Globe and Mail calls the “it” province. Rich in potash, uranium, oil and gas, coal and copper, mustard and lentils. All of this has brought investment to
The proposed legislation would preserve and build on these successes. Indeed, the Government of Canada has every incentive to ensure that the
That is why, under the proposed legislation, local offices will be retained – offices that both reflect regional expertise and understand regional economies. Offices that will provide a local window of access - with the authority they need to make the regulatory decisions they should.
These local offices can give
So new approaches - bringing together the best of both worlds - the simplicity and consistency of one set of rules with the expertise and experience of regional capital markets. An approach that is long overdue.
Eight years ago, in 2003, Harold MacKay and the Wise Persons Committee issued a report calling for the reform of
Now, in 2011, it truly is time! The financial turmoil of recent years has revealed the weaknesses - and risks - of our fragmented system. We simply cannot afford to put this off any longer.
My hope is that
Building for the future - it’s what we do here in
We should say, “let’s try it” – rather than “we’ve never done it that way before – so let’s not.”
The possibility that our growth offers is that it no longer just allows our children to imagine a life away from small towns and to have the comfort of knowing that when they head home the roads will still take them there.
But more importantly today, knowing they don’t have to leave at all!
They are learning what community spirit is about. It is what