Alberta and Quebec urge provinces to resist federal push on national securities regulator

Provinces should not sign onto Ottawa’s plan

The governments of Alberta and Quebec are calling on other provinces to hold off signing any agreement supporting the federal government’s single securities regulator scheme.

Ted Morton, Alberta’s Minister of Finance and Enterprise, and Raymond Bachand, Quebec’s Minister of Finance and Minister of Revenue, are urging their counterparts not to rush into signing so-called “development agreements” with Ottawa.
Morton said provinces should not feel compelled to sign on by September 30, as directed by federal Minister of Finance Jim Flaherty, especially in light of the fact that three Canadian courts have yet to even hear evidence as to the constitutionality of the federal proposal.

“The deadline imposed by Ottawa is completely arbitrary and is just an attempt to put pressure on provinces and push its agenda forward in the face of mounting opposition,” said Morton. “There are other provinces, besides Alberta and Quebec, that do not support the federal proposal and others that have not taken a position, and I would urge these provinces not to feel pressured into signing something that will be taken by Ottawa as a sign of support.”

Bachand and Morton, representing two provinces that are contesting in court the federal government’s proposal for a single national securities regulator, met in Calgary September 13 and agreed to send a joint letter to other provincial finance ministers to warn them of the implications of signing the federal “development agreement.”

“There is a very real concern that Ottawa will use the signed agreements as evidence of support, not only in the court of public opinion, but in the three courts that will be hearing this matter early next year,” said Bachand, referring to judicial references that have been put before the Alberta Court of Appeal, the Quebec Court of Appeal and the Supreme Court of Canada.

“Provinces that do not support this, or that haven’t yet decided their positions, should bear that in mind and not feel compelled to act before they’re ready. Entering into an agreement with the Canadian Securities Transition Office is a step in the wrong direction.”

Bachand is in Alberta this week to join Morton in explaining to the business communities of Calgary and Edmonton their reasons for opposing the federal plan.

Bachand recalled that securities regulation in Canada has always been provincial jurisdiction according to the Canadian Constitution, since it is a matter of property and civil rights. Federal intrusion in this area could set a precedent for federal intrusion into other areas related to the financial sector, such as pensions, insurance and credit unions.

“The federal government wishes to amend the constitution without following the proper process,” said Bachand. “The decision of a province to sign an agreement supporting the federal government’s single securities regulator scheme could cause long-term and possibly unintended consequences to the provincial jurisdiction and should therefore be weighted very carefully.”

Morton said a single national securities regulator would hinder investment opportunities for many Alberta businesses and investors because it wouldn’t be responsive to regional interests. The current system, which respects provincial jurisdiction, is flexible enough to accommodate the unique needs of local markets while also providing a single point of access to markets across Canada through highly harmonized regulation with other provinces and regulators.

“The system we have now already accomplishes all that we’re told this new system will – and more,” Morton said. “It is a system that is proven to work well and one that is consistently ranked as one of the best in the world by international organizations and think tanks.”

Alberta and Quebec will be supporting each other’s references before their respective courts of appeal and both will also take part in the federal reference being heard by the Supreme Court of Canada. All three references are scheduled to be heard in early 2011.