The federal government says it is pressing ahead with its own "co-operative" plan for a revamp of Canada's splintered securities regulation, despite an alternative proposal from Alberta.
Alberta finance minister Doug Horner floated a new idea for regulatory reform Wednesday, saying new national bodies should be created to handle enforcement and systemic risk, while the provincial securities commissions remain in existence and keep their control of other regulatory issues.
This differs from the federal government's current proposal, which is essentially a co-operative system where the provinces would jointly run a new national securities regulator. Only British Columbia and Ontario have agreed to that model.
A federal finance official said in an e-mail Thursday that the department has not received a "detailed proposal" from Alberta, and that it is still committed to working with British Columbia and Ontario to establish its "co-operative capital markets regulator" that was announced last September. On Wednesday, the finance official said the department had not seen the proposal at all.
Ottawa's model "will ensure that investors are better protected, the efficiency of capital markets is enhanced, and systemic risks in national capital markets are managed more efficiently and comprehensively," the official said.
Mr. Horner said it doesn't makes sense to follow the federal government's plan, since it has so little support and it will just fragment the regulatory scene further.
Because Ottawa's key concern has been the need for consistent enforcement, it makes sense to focus on that issue, Mr. Horner said. Under his model there would be a national enforcement agency and an associated quasi-judicial tribunal – both likely based in Toronto – to rule on criminal code violations or other serious securities issues. A separate, formal, systemic risk committee would be chaired by the federal finance minister, to address concerns that systemic risk requires national oversight.
Alberta's scheme would see existing provincial securities commissions continue to handle local regulatory issues, and perhaps deal with securities violations that are limited to activity in that province.
Ian Russell, chief executive officer of the Investment Industry Association of Canada, said Alberta's plan contains some good ideas, but the timing isn't appropriate.
The federal plan is more comprehensive and optimal, he said. It respects provincial jurisdiction over the securities industry because the enabling legislation would be provincial, and there would be significant provincial oversight.
The co-operative model will establish one set of regulations across the country, Mr. Russell said, but it will also allow for regional autonomy because there will be regulators in every major jurisdiction and offices across the country.
He said he is confident that "another significant province" will soon join B.C. and Ontario in supporting the federal plan, and this will give the proposal momentum which will bring in others.
"It would be a tragedy if we stop now without at least going the limit and trying to get another province in. One more province and this would be a done deal."