As I have written here before, I think the Harper minority government has done a generally competent job in quite difficult times. It is the contemporary, unflamboyant, no-frills or panache style, the type of regime exemplified by German Chancellor Angela Merkel. Nothing about Stephen Harper reminds us, for better or worse, of Barack Obama, Silvio Berlusconi or even Nicolas Sarkozy, and most Canadians would not wish it otherwise. The government moved deftly through the financial crisis, has handled competing regional demands well, has a sensible foreign policy, has shown courage in its support of Israel and in the commitment to Afghanistan, and is generally a solid regime, if not a barrel of laughs.
It does, however, have an inexplicable and dogged attachment to a couple of terrible ideas, both of which I have commented on before here. But they just get worse and the government should run, not walk, to the dust-bin to deposit there its proposals for a national securities regulator and for larger prisons, longer criminal sentences and harsher treatment of inmates. The national securities regulator is now a constitutional argument to be determined by the Supreme Court of Canada. Securities regulation has previously been an exclusively provincial jurisdiction, and anyone who has ever done an underwriting or sought a securities law ruling in this country knows how tedious it is to petition Prince Edward Island and the Yukon and others for a waiver on details (though I must add I always found them to be much more reasonable than the larger securities jurisdictions).
The proposed federal measure aims to set up "a single, national, securities regulator," but this is not based on any semblance of reality, as Quebec, Alberta, Manitoba and Saskatchewan are already vehemently opposed to the proposal. The federal government may conceivably gain a clearance for the establishment of a federal securities regulator, but the Supreme Court could not conceivably announce that Quebec, as a particularly vivid example, no longer possessed any power to regulate in that area, where it has been authoritative and unchallenged for 144 years. The proposed legislation states that provinces must opt in and the federal minister of finance must be satisfied that a single regime will apply to that province before that province can participate. In other words, there will only be a single regulator where theprovinceaccedes, andwhere the spirit of voluntarism flounders, there is no federal ability to strangle reluctant provinces (unless Jim Flaherty and the Supreme Court have gone completely mad). So there will be no single, national securities regulator, which begs the question of why this farce continues.
The lust for authority of the federal government is understandable in concept, but it is a complete mystery why Ontario is supporting this initiative. It states in its factum that there is a "rational basis" for the federal government to regulate all securities, but if this rationale prevails, the federal government might just as legitimately be back to assert such a right over almost anything, from education to the environment. The McGuinty government seems not to have figured out that a national regulator will severely diminish Toronto's influence in such matters. The proposed measure would just create multiple layers of regulators, subsume chunks of the Toronto financial community into Ottawa and drive others to Montreal and Calgary. Those cities could probably do a better job than does the Ontario Securities Commission, a blundering and retrograde regulator, but Ontario would not be well-served by such a change.
The key to financial regulation is to have as little of it as possible. Criminal statutes deal quite adequately with fraudulent prospectuses and financial skullduggery, and capital will go where regulation assures integrity without throttling enterprise. The current effort of the American Securities and Exchange Commission and the U.S. Justice Department to resolve the argument about whether greedy businessmen or the utter incompetence of the political class brought on the recent recession, by indicting the private sector debating team and trying to penalize vast categories of business people, should be a bonanza for Canada. It will not be if this foolishness turns Canadian regulation into a permanent federal-provincial fusillade.
Securities regulation grew legs with Franklin D. Roosevelt's founding of the SEC in 1934, a bone thrown to those convinced that the Depression was brought on by crooked speculators. As founding chairman he named the crooked speculator Joseph P. Kennedy, and explained to incredulous journalists: "Set a thief to catch a thief." Neither Roosevelt nor Kennedy intended for an instant for the regulator to become the omnipresent pest and obstruction to commerce that the SEC and OSC now are. The financial markets are not an annuity, and more regulation will just make them less profitable and drive capital elsewhere, as shares are interlisted to ever more exotic and relatively free places. Regulation is a placebo for the irate and the imprudent, and it is never sufficient regulation, as we learn after each cyclical trip to the financial woodshed, followed inexorably by another binge in the regulatory outhouse.
While this madness reigns, the government is inching at a pace appropriate to the ponderous mind of the average correctional officer down the path laid out by its Roadmap to Greater Public Security. The most recent leaps backwards have been on mandatory minimum sentences, harsher marijuana laws and extension of almost all sentences -- all bad, unjust and expensive mistakes. Mandatory Minimum Sentences deprive judges of any discretion and pre-sentence convicted people without regard to individual circumstances. It is a politically catchy method of avoiding the perceived problem of soft-hearted judges letting people off lightly. It has been a catastrophic failure in the United States, from which the designers of the Roadmap have cribbed it, and emulating it in Canada would be an outrage. This is especially true when minor marijuana offences are penalized doubly harshly, as is proposed, and addiction treatment is de-emphasized in the prisons. It costs $57,000 in the provincial systems and $88,000 in the federal system to house a prisoner for a year. There is no rationale or excuse for confining those who are not physically dangerous, nor for reducing their access to treatment, which is cheaper, more effective, and more humane than prison, though less likely to appeal to knuckle-dragging deadbeats of the jail 'em, flog 'em, hang 'em school.
Canada's vocation is as the world's great liberal pioneer, to be tough on crime by treating its causes, and reducing the unnecessary and hideously expensive demonization and segregation of the non-violent. Canada should not, in Michael Ignatieff's apt phrase, be "dumb on crime" by stigmatizing and tormenting trivial offenders, and assuring that greater numbers of young and of native people are ground to powder in the criminal system. The government is in hot pursuit, without a warrant, of higher costs, more crime, more misery and deeper roots among the most reactionary and uninformed voters. It is bad policy and shabby politics. The government can count on those votes already, so it is not clear why it is alienating the rest of us, those who want a justice system based on decency, efficiency and results, not on oafish posturing.
cbletters@gmail.com
It does, however, have an inexplicable and dogged attachment to a couple of terrible ideas, both of which I have commented on before here. But they just get worse and the government should run, not walk, to the dust-bin to deposit there its proposals for a national securities regulator and for larger prisons, longer criminal sentences and harsher treatment of inmates. The national securities regulator is now a constitutional argument to be determined by the Supreme Court of Canada. Securities regulation has previously been an exclusively provincial jurisdiction, and anyone who has ever done an underwriting or sought a securities law ruling in this country knows how tedious it is to petition Prince Edward Island and the Yukon and others for a waiver on details (though I must add I always found them to be much more reasonable than the larger securities jurisdictions).
The proposed federal measure aims to set up "a single, national, securities regulator," but this is not based on any semblance of reality, as Quebec, Alberta, Manitoba and Saskatchewan are already vehemently opposed to the proposal. The federal government may conceivably gain a clearance for the establishment of a federal securities regulator, but the Supreme Court could not conceivably announce that Quebec, as a particularly vivid example, no longer possessed any power to regulate in that area, where it has been authoritative and unchallenged for 144 years. The proposed legislation states that provinces must opt in and the federal minister of finance must be satisfied that a single regime will apply to that province before that province can participate. In other words, there will only be a single regulator where theprovinceaccedes, andwhere the spirit of voluntarism flounders, there is no federal ability to strangle reluctant provinces (unless Jim Flaherty and the Supreme Court have gone completely mad). So there will be no single, national securities regulator, which begs the question of why this farce continues.
The lust for authority of the federal government is understandable in concept, but it is a complete mystery why Ontario is supporting this initiative. It states in its factum that there is a "rational basis" for the federal government to regulate all securities, but if this rationale prevails, the federal government might just as legitimately be back to assert such a right over almost anything, from education to the environment. The McGuinty government seems not to have figured out that a national regulator will severely diminish Toronto's influence in such matters. The proposed measure would just create multiple layers of regulators, subsume chunks of the Toronto financial community into Ottawa and drive others to Montreal and Calgary. Those cities could probably do a better job than does the Ontario Securities Commission, a blundering and retrograde regulator, but Ontario would not be well-served by such a change.
The key to financial regulation is to have as little of it as possible. Criminal statutes deal quite adequately with fraudulent prospectuses and financial skullduggery, and capital will go where regulation assures integrity without throttling enterprise. The current effort of the American Securities and Exchange Commission and the U.S. Justice Department to resolve the argument about whether greedy businessmen or the utter incompetence of the political class brought on the recent recession, by indicting the private sector debating team and trying to penalize vast categories of business people, should be a bonanza for Canada. It will not be if this foolishness turns Canadian regulation into a permanent federal-provincial fusillade.
Securities regulation grew legs with Franklin D. Roosevelt's founding of the SEC in 1934, a bone thrown to those convinced that the Depression was brought on by crooked speculators. As founding chairman he named the crooked speculator Joseph P. Kennedy, and explained to incredulous journalists: "Set a thief to catch a thief." Neither Roosevelt nor Kennedy intended for an instant for the regulator to become the omnipresent pest and obstruction to commerce that the SEC and OSC now are. The financial markets are not an annuity, and more regulation will just make them less profitable and drive capital elsewhere, as shares are interlisted to ever more exotic and relatively free places. Regulation is a placebo for the irate and the imprudent, and it is never sufficient regulation, as we learn after each cyclical trip to the financial woodshed, followed inexorably by another binge in the regulatory outhouse.
While this madness reigns, the government is inching at a pace appropriate to the ponderous mind of the average correctional officer down the path laid out by its Roadmap to Greater Public Security. The most recent leaps backwards have been on mandatory minimum sentences, harsher marijuana laws and extension of almost all sentences -- all bad, unjust and expensive mistakes. Mandatory Minimum Sentences deprive judges of any discretion and pre-sentence convicted people without regard to individual circumstances. It is a politically catchy method of avoiding the perceived problem of soft-hearted judges letting people off lightly. It has been a catastrophic failure in the United States, from which the designers of the Roadmap have cribbed it, and emulating it in Canada would be an outrage. This is especially true when minor marijuana offences are penalized doubly harshly, as is proposed, and addiction treatment is de-emphasized in the prisons. It costs $57,000 in the provincial systems and $88,000 in the federal system to house a prisoner for a year. There is no rationale or excuse for confining those who are not physically dangerous, nor for reducing their access to treatment, which is cheaper, more effective, and more humane than prison, though less likely to appeal to knuckle-dragging deadbeats of the jail 'em, flog 'em, hang 'em school.
Canada's vocation is as the world's great liberal pioneer, to be tough on crime by treating its causes, and reducing the unnecessary and hideously expensive demonization and segregation of the non-violent. Canada should not, in Michael Ignatieff's apt phrase, be "dumb on crime" by stigmatizing and tormenting trivial offenders, and assuring that greater numbers of young and of native people are ground to powder in the criminal system. The government is in hot pursuit, without a warrant, of higher costs, more crime, more misery and deeper roots among the most reactionary and uninformed voters. It is bad policy and shabby politics. The government can count on those votes already, so it is not clear why it is alienating the rest of us, those who want a justice system based on decency, efficiency and results, not on oafish posturing.
cbletters@gmail.com
