Canada Aims to Establish Capital Markets Regulator but Provinces Disagree

Canada’s national Minister of Finance and the Ministers of Finance in the provinces of British Columbia and Ontario have agreed to set up the nation’s first capital markets regulatory agency, but not all provinces agree with the initiative.

The proposed regulatory agency would be based in Toronto and directed by a board of independent directors. Each participating province would also be part of a joint council to oversee the whole system.

“A cooperative securities regulator based in Toronto will provide increased protection for investors, strengthen the competitiveness of Canada’s economy, lower costs and enhance the reputation of Canada’s financial services sector leading to more jobs and growth,” said Charles Sousa, Ontario’s Minister of Finance.

Yet the nation’s regulation could remain fragmented because not all provinces would necessarily join the proposed agency, and the nation can not mandate that they participate. In 2011, Canada’s Supreme Court struck down an attempt by the government to establish a national regulator, saying that each province had their own rights to market regulation.

In Alberta, the Minister of Finance, Doug Horner, announced that he need more time to review the proposal and that he is “surprised that all the provinces were not consulted on this proposal before it was announced.”

Quebec’s Minister of Finance, Nicolas Marceau, was much direct in his disagreement: “The federal government’s relentless effort to establish a Canada-wide securities regulator runs counter to the constitutional division of fields of jurisdiction, three unanimous motions by the National Assembly, and judgments handed down by the Court of Appeal of Québec and the Supreme Court of Canada. Through the project announced today, the federal government is seeking to achieve indirectly what it cannot achieve directly.”