Spending on securities regulator draws ire of provincial critics

Share

The Supreme Court has yet to green-light Ottawa's controversial plan for a national securities regulator but plans are already under way to spend up to $100,000 on its branding.

Alberta and Manitoba - two of the four provinces strongly opposed to Finance Minister Jim Flaherty's push for a national regulator - say the planned spending by a "transition office" launched by Ottawa shows a lack of respect for the Supreme Court and the provinces.

"To just ignore provinces and proceed with designing a logo is quite disrespectful of the provinces, in my opinion," said Rosann Wowchuk, Manitoba's finance minister, who predicts more provinces will come out against the federal plan. "There's more momentum opposed to [a national regulator]than there is supportive of it."

Alberta finance minister Ted Morton said the money for websites and business cards could "turn out to be a colossal waste of taxpayers' money" if Ottawa's plan is rejected later this year by the Supreme Court.

"It is offensive that federal officials should presume to know the outcome of the court references," Mr. Morton said in a statement to The Globe and Mail. "Proper respect for separation of powers should let the judicial process run its course before decisions like these are made."

The federal finance minister, who argues that Canada's patchwork of provincial regulators does not compare well internationally, unveiled draft legislation in May, 2010 that would allow provinces to opt in to a national securities regulator.

Mr. Flaherty insists the best way to oversee the trading of securities in Canada is through a national body that would perform education, enforcement and policy-making roles.

Anticipating the concerns of provinces like Alberta, Saskatchewan, Manitoba and Quebec that view securities regulation as a purely provincial jurisdiction, Mr. Flaherty immediately referred the draft bill to the Supreme Court to determine its constitutionality.

Monday at 5 p.m. was the submission deadline for provinces or groups that wish to intervene in support of Ottawa's position before the Supreme Court. According to a court official, Ontario was the only province to do so, while B.C. sent a letter requesting more time.

Provinces have until Feb. 11 to intervene against the legislation. Hearings are tentatively scheduled for April 13 and 14. On average, the Supreme Court issues rulings about six months after hearings, meaning the issue might not be resolved until late 2011. The issue is also before appeal courts in Alberta and Quebec.

In spite of this, the office set up to organize the transition to a national regulator is moving ahead.

According to a Jan. 5 federally issued request for proposals by the Canadian Securities Regulation Regime Transition Office (CSTO), firms have until Jan. 21 to submit their bids.

"The CSTO wishes to perform a branding exercise for the Canadian Securities Regulatory Authority (CSRA) to produce this new organization's initial logo for signage, business cards, letterhead, websites, tagline, fonts, colour scheme for external websites, colour scheme for internal websites," the request for proposals states. "The CSTO expects to spend less than $100,000 for this project."

The Transition Office issued a statement Monday saying the request for outside work is consistent with its Parliamentary approved mandate.

"This is not new spending, but funding already set aside in the federal budget for this specific purpose," the statement reads, adding that $100,000 is the maximum, rather than the actual, amount of the contract.

Mr. Flaherty and the provinces discussed the issue behind closed doors last month in Kananaskis, Alta., where it was clear some provinces remain strongly opposed to a national regulator. Ten of the 13 provinces and territories agreed to work with the transition office, but they could still choose to oppose the plan at a later date.

A spokesman for Ontario finance minister Dwight Duncan, who strongly supports Mr. Flaherty's plan, declined comment on the logo plans other than to say it appeared the transition team was pursuing its mandate.