Feds getting closer to creating national securities regulator, says Flaherty

Jason Fekete, 

Published: Tuesday, November 20, 2012

OTTAWA - Finance Minister Jim Flaherty says the federal and provincial governments have made "significant progress" on discussions toward a national securities regulator, nearly a year after the Supreme Court of Canada struck down Ottawa's plans as unconstitutional.

Indeed, provinces like Alberta - which had strongly opposed Ottawa's plans for a single securities oversight body - now say there's a "new dynamic" in play and that it's open to listening to proposals about a common regulator for securities, such as stocks, bonds and other investments.

Flaherty met Tuesday with Ontario Finance Minister Dwight Duncan to discuss reviving efforts to create a single, national securities watchdog, rather than 13 separate securities regulators in the provinces and territories.

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Duncan has been leading the charge in resurrecting discussions with other provinces about moving to a common regulator with common securities laws. He says a single regulator would be more efficient, provide greater protection and improve Canada's reputation in the global economy.

But provinces such as Quebec and Alberta have been fiercely opposed to the federal government's plans for a single watchdog, insisting securities oversight is a provincial responsibility. The Supreme Court of Canada largely agreed, ruling last year the federal government's proposed legislation for a national regulator overstepped its constitutional authority.

Flaherty said Tuesday he has been holding ongoing discussions with the provinces about a single regulator and believes they're making substantial headway on the file.

"We've made some significant progress. I don't want to be overly optimistic, but I think there's some prospect that we'll be able to get to a common position," Flaherty told reporters on Parliament Hill.

Asked whether there will be a national securities regulator, Flaherty said he's hopeful but also cautious.

"You know, I wish I could say yes. I've been working on this for six and a half years so I'm very cautious but I think we've made some progress. I think there's a lot of goodwill. We'll see in the next little while," the minister added.

The Supreme Court of Canada unanimously ruled late last year that Ottawa's proposed legislation to form a national securities regulator was unconstitutional, although the top court agreed the federal government does, indeed, have some oversight of securities regulation.

The Conservative government argued that control over securities fell under federal jurisdiction through its power over trade and commerce, but the top court said Ottawa's plans overstepped its constitutional boundaries.

The court ultimately ruled that oversight for the investment industry falls under the "property and civil rights" powers assigned to the provinces in the Constitution. However, the court also acknowledged federal jurisdiction over such matters as systemic risk.

Duncan said Tuesday that Ontario has been speaking with several other provinces in recent weeks, particularly Alberta and B.C., about improving the regulatory climate for securities, while also ensuring those provinces play important roles in regulating the market.


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