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Wednesday, November 19, 2008

Tories slithering to socialism with national securities regulator

The Tories announced that they will introduce a national securities regulator.  This is an utter disgrace and an open war on provincial sovereignty. If this new regulator were to be effective, they would have to abolish all the provincial regulators. Good luck with that!

Why is this happening? Because of the financial meltdown, they tell us. Never mind that we have not had any real fundamental meltdown compared to the Americans. In fact, those countries that have experienced major meltdowns (i.e. bank failures) are ones with unitary securities regulators.

Our national government will actually make the situation worse. Everything they try to manage has turned into dust: our national healthcare system, the depletion of fisheries, the backlog for those applying for new passports a while ago, etc.

Of course, don't forget that now every company will have to file their forms in French and English (or some civil servant will have to translate them). After all if they are a national regulator, how can this happen only in English. Our companies will face enormous difficulties filling out all the forms. And that will just be the start of the great bureacratic mess this new regulator will be.

The real driver behind this is Ontario that wants all the other provinces to follow their inefficient and socialist regulatory lead. They have their agent in Cabinet and Harper is blind to the naked power grab that the Ontario mafia is engaging in.

While you Tory delegates were passing resolutions on abortion and human rights commissions - someone should have been passing resolutions telling the "Taxer and Regulator"-in-Chief to keep his hands of our money. Alas, this will further centralize Canada at a time when Ontario is becoming fiscally unattractive and despotic.

Just when it looked like Canada might be a beacon of hope for liberty while the US is going mad with socialism - our spineless intellectually depraved Tories are following suit.

Posted by Moin A Yahya on November 19, 2008 in Economic freedom | Permalink


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Does the concept of stoicism hold any utility in your culture, Moin?

Your rhetoric is way over the top. Too over the top. Colloquially, you might be called a "DQ", or "Drama Queen". Have you considered manning up?

Posted by: Zeno | 2008-11-19 5:31:23 PM

Great post!

I know of many companies who stay away from Ontario because the regulatory costs are too high, not becuase they want to avoid oversight.

Since Alberta is now a rich market for fundraising, why endure the abuse of Ontario regulators?

The sad thing is that average Ontario investors miss out on opportunities because their regulator doesn't trust them to make the same decisions Alberta investors make everyday.

Posted by: Matthew Johnston | 2008-11-19 5:45:05 PM

Excellent post and spot on. Unless a big majority of citizens take a stand against this socialist collectivist encroachment, it will continue to eat away like the deadly cancer it is at the fabric of liberty and freedom.

Posted by: Alain | 2008-11-19 6:03:29 PM

Let's see now.

A national securites regulator who would have seen and been able to stop the fraudulent derivates mortage lending practises in the US would have been a real bad thing. Correct?

What freakin' world are you people living in?

Posted by: set you free | 2008-11-19 6:06:59 PM

Why did the Ontario -- or other provincial regulators -- not catch this lending practice, set you free? Let me guess -- not a broad enough mandate, not enough powers.

Posted by: Matthew Johnston | 2008-11-19 6:19:44 PM

SYF, you are way off the mark to claim that a national securities regulator in the US would have been able to stop the fraudulent mortgage lending practices, when it was the American federal government that demanded that bad loans be granted in the first place. The whole problem was created by government meddling and interfering in the first place.

Posted by: Alain | 2008-11-19 6:44:09 PM

Our national government will actually make the situation worse. Everything they try to manage has turned into dust:
Posted by Moin A Yahya on November 19, 2008

Yep, that's right. And its right every time.
This is yet another opportunity for the Central Planning Socialist Agenda coming out of Ottawa to reach a little deeper into our lives. And as usual, it all went down while most of us were quibbling about irrelevant Bullsh*t. Nothing new here.

Does the concept of stoicism hold any utility in your culture, Moin?

Your rhetoric is way over the top. Too over the top. Colloquially, you might be called a "DQ", or "Drama Queen". Have you considered manning up?

Posted by: Zeno | 19-Nov-08 5:31:23 PM

Are you actually making a suggestion of some kind?
Or maybe you just don't like anyone to criticize the status quo? Any how, name calling with nothing to back it up....now THAT'S Rhetoric.

If you're not outraged, you should be...

Posted by: JC | 2008-11-19 7:01:20 PM

Let's see now.

A national securites regulator who would have seen and been able to stop the fraudulent derivates mortage lending practises in the US would have been a real bad thing. Correct?

What freakin' world are you people living in?

Posted by: set you free | 19-Nov-08 6:06:59 PM

Some one in government with a lot of power and a title...that'll fix things? "More" regulation?
That'll fix things?
Why would you think that this post would come with any more integrity than that already shown by Ottawa? Its just another damned government bureaucracy...by definition useless and controlling, and very probably, incompetent.


Posted by: JC | 2008-11-19 7:06:30 PM

I disagree. Canadian public markets are far more corrupt than the American markets. It is well known our banks lend money to resource companies and then their brokerage arm shorts the crap out of them. CIBC and Scotia are knee deep in naked short activity - they are by far worse than any US brokerage. The crap that goes on in our markets would never be tolerated under even the lax system down south. Brokers in Canada are sociopaths.

Posted by: Faramir | 2008-11-20 2:18:55 AM

1. The Securities & Exchange Commission in the United States is the sole securities regulator. It has been so since the 1930s. During that time, scandals have abounded and companies have collapsed.

2. The fraud that Faramir alludes to may very well be true; and yet, we have never had any mass scale scandals and collapses such as Enron, WorldCom, or the most recent bank failures.

Our system may not be perfect, but we have options. If it aint broke don't fix it. What the Tories are doing, the Liberals tried to do long before any of the financial meltdowns. This is just a naked power grab unbder the guise of the national interest.

Posted by: Moin Yahya | 2008-11-20 2:27:10 AM

After the great depression, congress put in place the Glass-Steagall Act. That was in 1933. Glass-Steagall was passed by Congress to prohibit banks from owning full-service brokerage firms and vice versa so investment banking activities, such as underwriting corporate or municipal securities, couldn't be called into question and also to insulate bank depositors from the risks of a stock market collapse such as the one that precipitated the Great Depression. 9 years ago they took those regulations off and President Bush signed it's final death. With no oversight or regulations, greed took over. This act separated investment and commercial banking activities. At the time, "improper banking activity", or what was considered overzealous commercial bank involvement in stock market investment, was deemed the main culprit of the financial crash. Which is what is happening today. They need to put the regulations back in place.
( history: As a collective reaction to one of the worst financial crises at the time, the Glass-Seagall Act set up a regulatory firewall between commercial and investment bank activities, both of which were curbed and controlled. Banks were given a year to decide on whether they would specialize in commercial or in investment banking but not both. This act also allowed for depositors insurance for the first time ). Deregulation and greed is a deadly combination. Gov'ts don't need to meddle in all aspects of our lives, but having some common sense rules and regulations in place is needed.

Posted by: Les | 2008-11-20 6:51:26 AM

27 Hawkside Close, N.W.
Calgary, AB. T3G 3K4.

Hon Stephen Harper,
Prime Minister,
80 Wellington Street,
Ottawa, Ontario. K1A 0A2

Dear Prime Minister,



I am absolutely against the creation of a National Securities Regulator to be owned, operated and managed by the Federal Government. It has been stated that Canada needs such a national regulator to give credibility to Canadian Securities markets. I submit that the Federal government would give no credibility to Canadian securities sales and marketing. The Federal government has a record of improper and close to unlawful dealings and a record of financial debacles unmatched by any of the Provinces. Consider AdScam, Science and Tecnology grants, the HR Debacle and waste, tainted blood, and the list goes on and on. Imagine Andre Oulett as the minister responsible for NSR; imagine Chuck Guite as the beaurecrat responsible for administration of the NSR; imagine the RCMP investigating money laundering inside the NSR. Even the very appointment of the NSR Chairman and its office location would tear the heart out of most of our politicians attempting to locate that vehicle of influence in their own province. Even where the unlikely occurred, and A Calgary Chairman and a Calgary head office location were chosen I would still be doubtful of its long term inability to fend off political influence. The provincial system we now have may not be perfect, but it has credibility now because of its’ 10 jurisdictions and because 10 jurisdictions have less likelihood of being politically manipulated by a federal government or by the two largest provinces of Ontario and Quebec. The “Passport” system of provincials approvals sound workable from what I read in the paper and we should give it more time to mature and be viable.
Writers claim that a NSR would prevent a future Bre-X. But would the NSR stop one of Canada’s largest financial debacles which in my mind was Air Canada. AC lost $4-5 billion of taxpayer’s money and lost $6-9 billion of bondholder’s investment funds, plus the shareholders equity losses. The same management and the same Unions are still running AC, a financial reorganization and loss to Canadian investors that on a per capita basis exceeded that of Enron in the USA.

A Federal regulator would require 100% mandatory conversion to French language bilingualism, (and you know in your heart that Quebec will not go along with another federal regulator), gender equity in hiring practices; both issues that would increase the cost of securities issuance not reduce it, nor create operating efficiencies of benefit to Canada’s corporations and investors.

As a an Albertan and a Westerner we do not need our junior startup companies stifled by a federal beauracracy with a sullied reputation for mishandling of financial matters in their own government operations. Flaherty has badly hurt the financing capability of the junior oil and gas industry in Alberta by applying a 31.5% tax on income trusts.

Compliance/policing/investigating..there may be room for the federal government with their deep financial pockets to be involved in the prosecution of financial misdeeds. In fact try this for 10 years and then consider amalgamating the prosecution group with the provinces.

I write this letter as an interested citizen, a past stockbroker, and as a lifelong investor in the capital markets.

Yours Truly,
JACK Ellefson

Posted by: j.ellefson | 2008-11-20 9:48:03 AM

Since this is about creating doubt about the perfection of rulemakers, it's easy to concede one point ... rulemakers are not perfect.

Still, if a car manufacturer build a vehicle whose wheels fall off when it reaches speeds of 130 km/h, how would the ordinary know or even be warned of the danger?

There is a role for the state in ensuring that the consumer at least be aware of the risks of purchasing such a vehicle, if not outright making sure it never hits the road.

Is that socialist?

Where were the regulators who purportedly represent ‘we the people' when the financial vehicle of the subprime mortgage was such a risky vehicle that it was headed for a crash?

If that the type of no-rules, bring-on-the-dope world that's being advocated here? OK, that's a rhetorical question.

The type of anarchy that's being increasingly advocated here can only work if individuals have a strong moral code, a sense of what's right and wrong.

Much like the unscrupulour theorietical car manufacturer, there will always be those who believe the rules do not apply to them.

History has come up with a clear understanding of what motivates this type of conduct ... immaturity.

There has to be some commonly understood moral code, or at least a set of rules everybody can understand, to stop today's society to slide into further dysfuntion.

Looking the other way has proven to be a non-starter in the financial markets.

What part of this do you not understand?

Posted by: set you free | 2008-11-20 9:58:46 AM

Québec will never buy into this.

Posted by: Marc | 2008-11-20 11:12:35 AM

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