Minister Peterson, guests, Meine Damen und Herren.
Well, that pretty well exhausts my German.
Capital markets, fortunately, speak a universal language.
You don't have to translate S&P, for example. Standard and Poor's are known worldwide and we are grateful for their sponsorship of today's lunch.
We've also been speaking a universal language among the cream of Canada's listed companies and the leaders of Germany's financial community.
That universal language is success. I might also note that the word dollar is of German origin - and the dollar has become a universal language in its own right.
In any case, the companies we are showcasing today are true Canadian success stories - as synonymous with the success of Canada as a leading economy as much as they represent success in its own right.
I'd like to talk a bit about these companies for a few moments, and Canadian capital markets before Her Excellency, Ambassador Bernard-Meunier, introduces the Honourable James Peterson, our speaker today.
Let me say, Excellency, how much we appreciate all the work done by your staff to make this a success, and how much we appreciate the hospitality of Toronto's twin city, Frankfurt.
As for our companies, let me start with the Canadian Pacific Railway.
It is the oldest of the companies being showcased here today and, if there is a company that is seen by Canadians and foreign investors alike as a surrogate for the Canadian economy, it is CP Rail and her sister companies.
Indeed, Canadian Pacific is synonymous with the very creation of Canada as a trans-continental nation and its emergence as a modern, sovereign country spanning the top half of North America.
Without the CPR, it is very difficult to imagine the American comic Robin Williams' being able to define his own country, the United States, as "one nation, under Canada."
The only Canadian company here today with deeper roots in Canada is our own, the TSX Group, which traces its origins to the formation of the Toronto Stock Exchange in 1852.
The others in our group today are of more recent vintage but their stories, like that of the Canadian Pacific and TSX Group, are the stories of Canada's unique way of creating global companies.
Canadian Natural Resources, in 1989, employed nine people in the Alberta oil patch. It had a market cap of $1 million - we have a lot of companies like that on our exchanges. Now Canadian Natural is a $10 billion company.
Suncor goes back to the Sun Company, which opened an office in Montreal in 1919 selling fuel oil and gasoline imported from the United States. As a result of its pioneering work in the Athabasca Oil Sands - now considered one of the biggest petroleum reserves in the world - Suncor is now a major integrated producer.
Our third energy company, Nexen, was created in another typically Canadian way - by forming a new company out of older, smaller operations. Now Nexen is a global player operating in the oil sands, in the Gulf of Mexico, South America, the North Sea, the Middle East, Africa, Southeast Asia and Australia.
Or consider the success stories of Rogers Communications. Back in the 1920s, Ted Rogers Senior, invented the first alternating current radio tube. It allowed radios to be powered by ordinary household current.
Today, Rogers Communications is run by Ted Rogers Jr., who pioneered stereo broadcasting, and it is Canada's biggest player in cable and wireless with operations in everything from internet access to mobile phones, paging services and video retailing.
ATI Technologies is a different kind of tech company. It produced its first graphics product in 1985. Now it markets multimedia and graphics components for personal computers, digital television and consumer electronics for customers around the world. That includes Germany - ATI set up its first European office, in Munich, in 1992.
Our third tech leader, MDS Inc., followed another typically Canadian route. Five IBM employees in Toronto decided to leave Big Blue to form a company to provide computer support for medical care. By merger, acquisition, joint venture and organic growth, MDS now has 10,000 employees in 24 countries.
Technology as well as family origins figure powerfully as well in two other companies represented today, Bombardier and Magna.
Bombardier was formed in the 1940s by Quebec's Bombardier family to build tracked vehicles capable of transport over - what else? - snow. Out of this came the Ski-Doo and out of the business built on the Ski-Doo came the whole range of transportation products - high speed trains, subway cars, executive and regional jets but no longer the Ski-Doo - that represents Bombardier's world-wide business today.
The second, Magna International, is another family company grown to global scale. It was founded by Frank Stronach, an Austrian immigrant to Canada in 1957, as a tool and die company.
Opportunity came in the form of the Canada-U.S. auto agreement and now Magna, run by Mr. Stonach's daughter, is one of the world's largest and most diversified suppliers of auto components, systems and modules for the world's biggest automakers.
And finally, our tenth company, Four Seasons Hotels Inc. This is a company, formed in Toronto more than 40 years ago, that now operates the best - and some of the best-known - luxury hotels in the world, from its flagship in Toronto to The Pierre in New York, the Ritz Carlton in Chicago, the Grand Formosa Regent in Taipei and the Four Seasons on Charlottenstrasse in Berlin.
Quite a group, I think you will agree, and we are proud to showcase them for you today.
Some of you will have heard about TSX Group in the sessions this morning.
But for those of you only just joining us, let me tell you a bit about Canadian capital markets, and the role of TSX Group in those markets.
We own and operate Canada's two national stock exchanges, the Toronto Stock Exchange, the senior exchange, and the TSX Venture Exchange. TSX Venture is the best regulated junior exchange in the world and it is coming off a highly successful year - trading was up nearly 90 per cent in terms of value.
It may surprise you, but the market cap of the issuers on our two exchanges is pretty much in line with the market cap of German companies, despite the difference in the size of our two economies. Not that we're a small economy - in fact, we trade as much with the U.S. as the entire European Union.
In any case, the market cap of German companies as a share of the total market cap in U.S. dollars of the members of the World Federation of Exchanges was 3.3 per cent at the end of November.
The Canadian market cap was 2.9 per cent.
The U.S. share was down, incidentally, from 53.1 per cent two years ago to 46.5 per cent at the end of November. That reflects strong growth in Canadian equity values, stronger growth in German values - and the precipitous decline in the value of the U.S. dollar.
In the last year, in short, Germans who put their money in Canadian companies and Canadians who put their money in German companies did very well, much better than those who put their money in U.S. shares. Will that continue? Who knows?
What is clear is that our two country's markets have represented good value for each others' investors and we have every confidence that will continue to be the case.
One of the reasons for that is the underlying strength of the Canadian economy and of the fiscal health of the Canadian public sector.
Canada's federal government has been in surplus since 1997. That situation, especially in comparison to what is happening south of our border, has given Canadians considerable confidence in their investments, whether in real estate, in the market or in starting their own businesses.
We have, moreover, one of the healthier investment cultures in the world.
Nearly half of Canadian adults are invested in the market directly or indirectly, and that is not counting equity investments on behalf of every working Canadian by the country's public pension plans.
We also have one of the healthiest market structures in the world. Five years ago, there were six Canadian exchanges - the Toronto Stock Exchange and five others - and we were in a decidedly unhealthy situation.
While U.S. exchanges like NYSE and Nasdaq, and European exchanges like the London Stock Exchange, were making competitive thrusts into Canada, the six Canadian exchanges were focussed on battling it out with each other. We had the wagons circled, in other words, and our competitive guns were pointed at each other.
That has changed. The five smaller exchanges have become a single junior exchange, the TSX Venture Exchange. The Toronto Stock Exchange became the senior exchange. We now own both the senior and junior exchanges. They are run off a common trading system based on new, cutting edge technology that is as fast and cheap as any of the new electronic trading systems used by our global competitors.
In fact, a study for Deutschebank found we are among the lowest cost exchanges in the world on big trades, with impact and other costs only marginally higher than those on the CAC 40 or the Dow 30 - and only a third as high as all-in costs on the London Stock Exchange.
That has allowed us to focus on the real competition we face, which is not at home but in global markets, especially the U.S., and to expand our horizons and our presence in the U.S., Europe and Asia.
In two weeks, we'll be launching our U.S. dollar trading, for example.
And, of course, we have been building our presence in Europe and Asia. This is our first showcase for our issuing companies, but we've been building our presence for more than a year now in London, Brussels, Geneva and elsewhere - and as many of you will know, we were a sponsor of the European Film Awards in Berlin in December.
We have some unfinished business at home. Our regulatory structure remains as it has been - so we continue to be the only major industrial country without a single regulator. We have 13.
But we have been making progress on that, too. And one reason is our speaker today, the Honourable James Peterson.
I will always treasure that moment last November, during the Canada-Europe CEO Round Table when the minister took the microphone after a panel debating the relative merits of various changes to make our regulatory system simpler - while still having 13 regulators.
He asked the panel - Why don't you just create a national regulator? That set the cat among the pigeons.
In fact, Jim is one of the best qualified people in the federal government for dealing with the regulatory question.
As minister for international financial institutions in the previous government, he immersed himself in getting a 900 page bill on banking through Parliament. And he succeeded.
He also managed to successfully negotiate with the Canadian provinces the creation of a banking ombudsman's office.
And after he left cabinet, he followed the debate on regulation intensively.
So we are delighted he is back in cabinet.
He does not as it turns out have the regulation file. But it's nice to know he'll be at the table when the Canadian cabinet comes to debate the issue, and we're confident he and his colleagues will come up with the solutions we need.
And in his role as trade minister, he offers good value in other ways. Trade is not an easy issue. We have even more problems on the U.S. front than Europe, though they may be easing off a bit with a new prime minister in office.
But Minister Peterson has one file in his portfolio that is a big potential plus. That is the work that is going on to create a Canada-EU trade and investment enhancement agreement. Some people have called it free trade without agriculture, and that takes in a lot.
We happen to believe that this agreement can become an important example of how to create freer trade in securities and in other industries as well, by establishing the validity of mutual recognition of different regulatory approaches in our two markets.
Essentially, we believe that the idea of creating a single set of rules for capital markets is such a complex and difficult job that it is far better to find a way to accommodate differences, provided regulators in each market have the same basic objectives for protecting investors.
Mutual recognition provides a basis for regulators agreeing on principles, even while they maintain the inevitable differences that different traditions, practices and expectations create in different national or regional markets.
So we are hoping that Minister Peterson will be able to advance this process.
He is certainly one of the best prepared trade ministers that Canada has had, and as knowledgeable as any minister in memory about why efficient capital markets are an absolute essential for any economy that aspires to global success.
Starting out as a lawyer specializing in international tax law hasn't hurt a bit in this regard. Nor has it hurt that he's had a hand in every federal budget, save one, in the last decade - a series of budgets that have made Canada the only major industrial country in the world that with a fiscal surplus.
Some have even gone so far as to call that achievement Canada's very own Wirstschaftswunder.
That's the only other German word I know. So let me stop there, by reiterating my thanks to everyone who has worked to make this showcase a success, and to all of you who have joined us here for lunch.
