Flaherty outlines securities watchdog plan
Finance Minister Jim Flaherty unveiled a federal government plan Wednesday to create a single Canadian securities regulator.
Under the proposed Canadian securities act, the new regulator would replace the current "balkanized" system where Canada has 13 regional regulators, Flaherty said at a news conference in Ottawa.
"[That's] 13 sets of rules and 13 sets of fees," Flaherty said.
Flaherty will bring the bill to the Commons on Wednesday, but Ottawa will also ask the Supreme Court for advice on the issue.
"We'll be asking the Supreme Court of Canada a clear question: is the next proposed Canadian securities act within the legislative authority of the Parliament of Canada?" Flaherty said.
Currently, each province and territory runs its own regulator. Two provinces — Alberta and Quebec — have vowed to fight any plan to create a single national regulator. A number of larger Quebec companies have joined with the province in opposing Ottawa's plan.
For decades, both Conservative and Liberal federal governments have tried to replace the current system.
'We have to be absolutely sure [to] not harm provincial jurisdiction.'— Liberal Leader Michael Ignatieff
Liberal Leader Michael Ignatieff voiced his cautious support for the proposal Wednesday, as long as it doesn't encroach on provincial activities.
"We have to be absolutely sure that a cross-Canada solution will not harm provincial jurisdiction," he said. "It is possible to have an institution which is there to protect investors' investments, but we shouldn't be doing that at the expense of the jurisdiction in Montreal or Vancouver or Calgary," Ignatieff said.
Reaction from the provinces was not nearly as conciliatory. "We will defend our jurisdictions with plenty of vigour," Quebec Premier Jean Charest told reporters in Quebec City.
"We will keep up the fight in the legal arena. We will keep up the fight in the political arena. We will keep up the fight in the economic arena," Finance Minister Raymond Bachand added in the Quebec legislature.
Alberta was equally cool. "I'm concerned the federal government continues to push ahead with its agenda to usurp provincial authority … in the absence of any evidence the current system needs fixing," Alberta Finance Minister Ted Morton said in a statement.
"A federal regulator headquartered in Toronto could make it harder for … Alberta businesses to raise funds for growth and development," Morton said.
The plan does appear to have some provincial support, as British Columbia and Saskatchewan, which were once hostile to it, now endorse the plan. And Ontario has been in favour of it since the beginning.
Ottawa has argued a single regulator would be more efficient, reduce compliance costs for listing companies, and better co-ordinate regulation with the U.S. Securities and Exchange Commission.
On Wednesday, Flaherty said a single regulator would be better able to fight fraudsters such as Earl Jones and Vincent Lacroix, whose schemes cost investors hundreds of millions in recent years.
"Those who commit securities fraud will face a tougher, more comprehensive regime," Flaherty said. "No more falling through the cracks."
If approved, the new regulatory body would oversee securities trading and serve as a financial watchdog across the country.
Canada is the only country in the G20 without a national securities regulator, and Flaherty has called the current system of separate regulators an "embarrassment" to the country.
With files from The Canadian Press