The bizarre case of a “national securities regulator”

So a couple of additional provinces might sign up for Ottawa’s deal to create some sort of centralized securities regulator.

Ottawa just won’t let go of this foolish idea. Having been rebuked by the Supreme Court, having been shown that all the claims made to justify a “national”security commissions were bogus, the federal government is now trying to wiggle back in through a small window left unsecured by the Supreme Court’s judgment.

So, let’s not call this thing “A National Securities Commission» but rather “A Cooperative Capital Markets Regulator” (CCMR) and let’s pretend that the provinces will enact a “provincial” legislation as long as there is a single, uniform one for all provinces! The federal government will produce a “complementary federal legislation” on criminal matters, systemic risk, etc. which will be enforced even in provinces that have not joined the CCMR.

Then, a memorandum of agreement will be signed by all parties essentially creating the centralized administrative structure of a “national securities regulator”.

“Regional” offices”, led by a deputy chief regulator under the authority of the central office, will provide the range of services that provincial securities commissions now provide. This sort of centralization becomes acceptable because some provinces are willing to delegate to a central entity a jurisdiction which is theirs, as confirmed by the Supreme Court of Canada.

Now, in January 2014, a press release was issued informing us that BC, Ontario and the federal government were making great progress in getting their ducks aligned; it was foreseen that a draft provincial law, the federal complementary law and the memorandum of agreement would all be ready by April 30th 2014 and the draft regulations by June 30th. All these dates have passed without anyone, outside inner circles, getting a peek at these draft documents. But, some provinces, it appears, are ready to sign on this deal, documents unseen.

Other than Ontario, which has been forever salivating for a “national regulator” located in Toronto to seal its position as the single financial center in Canada, it is difficult to understand why other provinces would jump aboard this ship. Perhaps, it is a case of the carrot and stick of the federal government in action.

Somewhere, somehow, the provincial ministers of finance of Alberta, Manitoba and Quebec will again have to make the case for provincial jurisdiction, forcefully, persuasively. They must plead with their colleague ministers of finance for more deliberation on their part; they must convey to them that this is a subject of great substantive and symbolic significance. For Quebec, this action by the federal government with the complicity of some provinces smacks of a minor Meech Lake fiasco!

(Opinions expressed herein are strictly those of the author).