Supreme Court to rule on national regulator

At the two-day hearing to consider whether Parliament has the legislative authority to create a national regulator the federal government argued that they have jurisdiction to regulate securities under their “trade and commerce” power, and that the securities industry falls under that power as set out in previous decisions. Federal government lawyers argued that securities regulation is a national economic concern, and that national regulation is necessary to properly oversee areas not addressed by provincial regulation, such as systemic risk.

It was primarily opposed by the governments of Alberta and Quebec, whose provincial appeal courts have already both ruled that the federal government does not have the proper jurisdiction. They argued that granting federal jurisdiction will represent an unprecedented intrusion by the feds into an area of historic provincial jurisdiction, and that it will dramatically upset the balance of federal and provincial powers that characterize Canadian federalism.

Notwithstanding its long-standing opposition, Alberta has since indicated that it would be willing to join the federal initiative if the court rules that way. The model proposed by the feds allows provinces to voluntarily opt into the authority if they chose to, but so far Ontario is the only jurisdiction that has explicitly supported the idea.

During the hearing, a variety of interveners, including the Canadian Foundation for Advancement of Investor Rights, the Canadian Coalition for Good Governance, the Investment Industry Association of Canada, and the Canadian Bankers Association, also supported the federal position. Whereas, the governments of New Brunswick, Manitoba, British Columbia and Saskatchewan, weighed in against it, as did various Quebec-based interveners.