“Now the provinces, especially those that opposed the national body, must step up and demonstrate how they would replace that vital investor protection,” said Susan Eng, CARP’s vice-president for advocacy.
Quebec’s business leaders were quick to applaud the decision. (Read more on Quebec's reaction here)
A coalition of Quebec companies and business leaders headed by the provincial government said the decision was a major victory “across the board” for the existing decentralized system of harmonized regulation among the provinces and territories.
The province is now urging Ontario to embrace the court decision and join the other provinces to reinforcing the current system.
“It sends a signal to Ontario that it should join the existing provincial system,” said the coalition’s spokesperson Françoise Bertrand, who is president of the Quebec Federation of Chambers of Commerce.
According to the Quebec group, which included business leaders such as media giant Quebecor Inc. the drugstore chain Jean Coutu Inc. and papermaker Cascade Inc. the current system of 13 provincial and territorial regulators offered the best environment for both local businesses and investors.
Ms. Bertrand said the court decision confirms that the existing system works and that provinces have the ability to oversee securities trading while fostering the emergence new businesses.
“We have companies here who issue a small number of shares which were the very foundation of companies such as the Uniprix chain of pharmacies or Couche-Tard convenience stores,” Ms. Bertrand said. “The closer the access is to home the easier it is to exchange views... For businesses that is a valuable asset.”
Ontario is not giving up on the idea of creating a single regulator, said Finance Minister Dwight Duncan, adding that ministry officials are reviewing the Supreme Court decision to assess its full implications for the province.
“The Court has noted that a national regulator can still be attained through joint government action,” Mr. Duncan said in a statement. “Ontario remains committed to working with other governments to find a way to achieve that outcome.”
Later Thursday, Alberta Finance Minister Ron Liepert, who favours the current system, said the province is willing to consider changes to the existing framework, but argued the passport system meets the needs of Canadian businesses.
The passport system allows companies to obtain regulatory approval from their home province or territory, with that approval valid in other jurisdictions participating in the system.
“If someone, whether it is the federal government or other provinces, can identify specific [concerns about the current system] we’re prepared to listen to those concerns,” he told reporters at a Calgary press conference. “If there is any proposed changes... have them come forward with it.”
Alberta, he said, wants the federal government and other provinces to push Ontario to join the passport system.
“We have a very modern securities system that has adapted, has adjusted, and has attempted to be flexible across the country,” he said. “We feel that the system as it stands today is very efficient and is working well for Canadians.”
The Supreme Court’s decision was very clear, Mr. Liepert said. “As far as we’re concerned, securities regulation in Alberta will be no different tomorrow than it was yesterday and probably won’t be any different a year from now.”
Alberta Finance on Wednesday said Mr. Liepert would not speak with reporters and would instead issue a statement after the court delivered its decision. The government changed its mind Thursday morning when the ruling sided with Alberta.
University of Ottawa law professor Errol Mendes, who is editor-in-chief of the National Journal of Constitutional Law, criticized the court for suggesting that somehow a co-operative approach can address risks to Canada’s financial system.
“The Supreme Court does not seem fully aware of the reality of how day to day can give rise to systemic risk,” he wrote in an analysis of the ruling that he provided to the Globe. “The complexity of the financial markets today is dramatically different from the time that the Constitution Act was passed in 1867. Overall, the decision of the Court on the national securities legislation is not a good decision for Canada.”