Three provinces have publicly signalled they are not willing to join a national securities commission by refusing to nominate a representative to a new federal advisory committee helping design the regulator.
The federal Finance Department on Thursday unveiled the membership of the new panel, which would include representatives from the 10 provinces and three territories. But three provinces - Quebec, Manitoba and Alberta - have so far declined to participate.
The committee will advise a transition office, headed by former British Columbia Securities Commission chairman Doug Hyndman, on the design of a new national regulator, which is intended to replace the current system of 13 provincial and territorial securities regulators.
Chisholm Pothier, a spokesman for federal Finance Minister Jim Flaherty, said yesterday the jurisdictions joining the advisory committee have not yet made a commitment to join a new regulator. He said they are indicating that they're interested in working on the plan, but a final decision will be made next year after a new national securities act has been drafted, and a detailed structure is available for review.
A spokeswoman for Manitoba Finance Minister Rosann Wowchuk said the province has made no decision yet about participating on the committee because there is a leadership campaign under way to replace Manitoba Premier Gary Doer, who recently announced his resignation. Former finance minister Greg Selinger, whose department is responsible for overseeing securities regulation, recently stepped down from his job to run for leadership of the provincial NDP.
Quebec remains the strongest holdout to the national plan and has filed legal action in the Quebec Court of Appeal to try to stop the process, arguing the plan infringes on the province's right to regulate the securities industry.
Alberta is arguing the existing "passport system" - under which all provinces except Ontario have agreed to work together to co-ordinate regulation - is a better system, said Robyn Cochrane, a spokeswoman for Alberta Finance Minister Iris Evans.
"We don't agree with the national securities regulator," Ms. Cochrane said yesterday. "We feel our passport system is working, and we view this as provincial jurisdiction. We feel a single federal regulator would hinder investment opportunities for small Alberta businesses."
One senior adviser familiar with the negotiations said he does not expect Quebec to embrace the proposal, but believes Alberta and Manitoba could still decide to participate. He said both provinces were willing to join a national regulator during negotiations in 1994 after seeking concessions on other matters, and may be willing to deal again this time as well.
Ian Russell, chief executive officer of the Investment Industry Association of Canada and a long-time supporter of a national regulator, said yesterday it is "disappointing" some provinces have declined to participate because they could have done so without making a final promise to join, and could have had an opportunity to help shape the design of the system.
Still, a national regulator can be launched with three provinces not participating, he said. "There is enough momentum and enough support in the country that this will get done."
Toronto securities lawyer Phil Anisman, who previously led a commission that recommended creating a national regulator, said there "no doubt" the system can work if three provinces do not join. The national regulator can develop a mechanism to co-ordinate with them, he said.
"When you talk about a minimum core group necessary to make a national system work, they are well beyond what you would have thought was the minimum," Mr. Anisman said.