A national securities regulator: dead or alive?
The Supreme Court of Canada declared the federal government's proposed legislation on a national securities regulator unconstitutional. But is that the beginning of the end for the idea or just the end of the beginning?
When he was younger, Max Fawcett wanted to make a mint in the markets. Now as the managing editor of Alberta Venture he gets to write about them. Close enough, right? He can be reached at mfawcett@albertaventure.com
by Max Fawcett
The federal government will have to go back to the drawing board if it wants to see the creation of a national securities regulator. In a unanimous decision, the Supreme Court of Canada ruled that the proposed legislation that would have created a single securities regulator was in conflict with the “property and civil rights” powers assigned to the provinces by the Constitution Act of 1867.
The ruling doesn’t necessarily spell the end of the federal government’s effort to create a single overarching national securities regulator, though. Instead, it may have laid the groundwork for a compromise between the Harper government and the provinces of Alberta and Quebec. “While the proposed act must be found ultra vires (beyond) Parliament’s general trade and commerce power,” the court wrote in its 64-page ruling, “a co-operative approach that permits a scheme that recognizes the essentially provincial nature of securities regulation while allowing Parliament to deal with genuinely national concerns remains available.”
Translation? A national regulator that also featured significant involvement by the provinces – effectively, one in which the federal government handled the big-picture concerns while the provinces dealt with the day-to-day duties – wouldn’t be unconstitutional. And while the notion of the federal government and its counterpart in Alberta co-operating on the issue would have seemed unthinkable a few months ago, new premier Alison Redford has dropped hints that she’d like to work more closely with her counterparts in Ottawa.
Indeed, earlier this month the Alberta government made overtures through the press that indicated it was more willing to work with, rather than against, the federal government on the issue. And while that was premised on the possibility that the court would rule in favour of the federal government, it stands to reason that Premier Redford’s government will continue to pursue a more conciliatory approach than it did before she assumed power.
As such, the Supreme Court’s ruling is just as likely to mark the beginning of serious negotiations over the creation of a national regulator as it is the end of them.
For more on the debate over whether Canada needs a national securities regulator, read our September 2010 story as well as AV columnist Marzena Czarnecka’s take on the subject.
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