Monique Jérôme-Forget, the Quebec minister of finance, gave a spirited defence of the passport model of securities regulation at the Investment Funds Institute of Canada’s leadership conference in Toronto on Wednesday.

Jérôme-Forget called on federal Finance Minister Jim Flaherty, not to “undermine” Canada’s “present achievements” by continuing to campaign for a single securities regulator but to instead support a “harmonized pan-Canadian regulatory system” — the passport model.

“The passport system builds on what already works” said Jérôme-Forget. She cited Canada’s performance in international rankings to justify her position. In 2006 the World Bank and Lex Mundi ranked Canada third worldwide for protecting investors. Also in 2006 the Organization for Economic Co-operation and Development rated the quality of Canadian securities regulation second. Both assessments placed Canadian policy above American and British programs. According to Jérôme-Forget this proves it is time for Canada to get over its “Bronze medal syndrome” and recognize the quality of the passport model it has developed.

She discounted the need for a centralized regulator citing Europe’s own adoption of passport model for securities regulation. Jérôme-Forget also cited the United States, which, while it ostensibly has a single regulator in the Securities and Exchange Commission, “contrary to a widely-accepted myth,” every state has its own regulatory body. Historically those bodies “reacted more quickly and more effectively than the central agency” to crises. Jérôme-Forget asserted that “the present Canadian system, even without any federal or national commission, is as uniform and harmonized as the American system.”

It is in the field of enforcement that the Canadian securities industry has the most ground to gain. With “uniform interpretation of common rules in Canada” in place after the implimentation of the second phase of the passport model Jérôme-Forget proposed the harmonization and strengthening of enforcement policies in order create an “independent securities tribunal” effectively “separating the supervisory function from the quasi-judiciary function of the securities commissions.” Harmonization of policy would, in turn, allow such a tribunal to be inter-provincial.

Although Jérôme-Forget applauded the creation of Integrated Market Enforcement Teams in Vancouver, Toronto and Montreal in 2003, the fact remains that Canadians perceive that fraud and other white collar crime are taken “less seriously than other crimes” to which she cited Doug Hyndman, chairman of the British Columbia Securities Commission.

In the course of address, Jérôme-Forget also stated her support for the Montreal Exchange’s retention of the Canadian Derivatives Exchange.

The full text of Jérôme-Forget’s address can be found at http://www.finances.gouv.qc.ca/en/index.asp.