British Columbia is interested in participating in a revived effort to create a national securities regulator, but is telling federal officials a new model would have to be structured differently to respect provincial jurisdiction over securities regulation.
Federal Finance Minister Jim Flaherty announced in his budget Thursday that Ottawa is again exploring whether there is provincial support for another attempt to create a national regulator to oversee Canada’s securities sector. The Supreme Court of Canada ruled in December that proposed federal legislation was unconstitutional and infringed on provincial jurisdiction, leaving uncertainty about whether the long-time effort to create a national regulator would be abandoned.
Since the December ruling, federal officials and members of the Canadian Securities Transition Office – a body created by Mr. Flaherty to develop a new national regulator – have crisscrossed the country speaking to provincial officials about whether a new model can be created that could win support.
Mr. Flaherty said Friday he “won’t guess” what his chances are of winning support, but said the government is willing to try again.
“I can tell you this, a number of provinces, including some of the larger provinces, have had continuing discussions with the federal government in light of the Supreme Court of Canada decision … I’m modestly encouraged by the discussions that we’re having so far.”
An official from the B.C. Ministry of Finance said the province supports the concept of creating a national regulator, but its support depends on creating a different model that respects constitutional jurisdictions, improves enforcement and “responds to regional economies” such as B.C.’s venture capital market.
“We think a national regulator is still possible if provinces and the federal government are interested,” the official said Friday.
Ottawa has been willing to move ahead with the idea even if all provinces do not opt to join the new regulator. Ontario has been the staunchest supporter of the proposal, and was the only province to side with the federal government in the Supreme Court hearing last year.
Quebec is likely to remain the strongest holdout to any revived plan. Finance Minister Raymond Bachand issued a statement Thursday saying he “does not understand why the federal government is persisting in its efforts” to create a national regulator despite the top court ruling.
Toronto securities lawyer Philip Anisman said he believes the Supreme Court decision left a lot of scope to create a national regulator. The model most often discussed would see provinces retain jurisdiction over securities, but “delegate” the work to a national body. This would not require provinces to cede control over the sector, and they would still have their own provincial securities acts rather than be governed by a national act.
“There’s lots of room for the feds to continue to pursue this,” Mr. Anisman said.