Canada's Finance Minister Jim Flaherty speaks during Question Period in the House of Commons on Parliament Hill in Ottawa June 9, 2010.CHRIS WATTIE
Alberta and Quebec are stepping up their campaign against the federal government's plan for a national securities regulator and say they hope to have other provinces join them.
"There may be only two of us today, but I am confident there will be a lot more than two before the Supreme Court [of Canada]next April on our side on this issue," Alberta Finance Minister Ted Morton said at a joint news conference Tuesday with his Quebec counterpart, Raymond Bachand.
The two provincial finance ministers presented a united front in their opposition to the draft legislation recently tabled by federal Finance Minister Jim Flaherty for a single securities watchdog.
They said they have asked Mr. Flaherty to immediately end the activities of the transition office now laying the groundwork for a national regulator.
Preparing for a national securities agency before a decision on the constitutionality of the plan from the Supreme Court is a major distraction for all parties concerned, the ministers said.
Both Quebec and Alberta have also gone to their respective highest courts as part of their efforts to block the project. They argue that securities regulation falls under provincial jurisdiction and that Ottawa's move is unconstitutional.
They also contend that the existing system of harmonized regulation among the 13 provinces and territories works fine and doesn't need fixing.
"Canada cannot afford to ignore the ongoing business of securities regulation for the next two years while the courts hear the cases. We cannot afford to redirect time and resources to design a new system that can be ruled unconstitutional," the ministers said in a statement.
Mr. Flaherty has said that Canada's system of 13 separate regulatory authorities is a costly and inefficient system that is also an international embarrassment.
Critics point out that Canada is the only member of the Group of Seven industrialized nations without a national securities regulator.
An official in Mr. Flaherty's office said the proposed federal securities act provides for new criminal evidence-gathering tools to better fight white-collar crime.
He also said a new regulatory regime will provide better and more consistent protection for investors across Canada, allowing for faster policy responses to emerging trends and making for simpler processes for businesses, resulting in lower costs.
Quebec and Alberta are fiercely opposed to a single watchdog, saying it represents a dangerous incursion into provincial affairs.
The two provinces also argue that a national regulator, likely to be headquartered in Toronto, would result in the loss of thousands of jobs and economic activity related to securities regulation in the regional financial centres of Montreal and Calgary.
A federal regulator "would over time undermine Calgary as the financial centre of Canada's oil and gas industries," said Mr. Morton, adding that it would make it more difficult for Alberta's junior oil and gas companies and other businesses to raise funds for expansion.
Both ministers said they agree with Ottawa's proposal to introduce tougher criminal code penalties for financial fraud and called on the federal government to press ahead on this front as soon as possible. Such amendments can be made under the existing passport system, they said.
Bertrand Marotte