Supporters of a national securities regulator are hailing today’s announcement that two more provinces have agreed to sign onto the latest plan as a sign that a single regulator is now inevitable, but opponents warn that the result will actually be increased fragmentation.

In the wake of the announcement that Saskatchewan and New Brunswick have decided to join Ontario, B.C. and the federal government in a bid to create the Cooperative Capital Markets Regulator (CCMR), proponents of the plan are calling the news a victory for long-standing efforts to replace the provincial regulatory framework with a new cooperative federal-provincial model. (See Investment Executive, Ottawa announces progress on securities regulator, July 09, 2014.)

“With the announcement that Saskatchewan and New Brunswick have agreed to participate, Ottawa now has the critical mass — approximately half of domestic capital market activity — needed to begin operations as a cooperative capital markets system,” said Ian Russell, president and CEO, the Investment Industry Association of Canada (IIAC).

The IIAC’s support was echoed by the Canadian Bankers Association (CBA). The plan’s supporters hope that the rest of the provinces will be convinced to join now, too.

“Provinces that are on the fringe will have to make a decision. It will only be a matter of time before most of the outliers will join because there are too many efficiencies to gain by coming into the fold and too many benefits lost by staying out,” the IIAC’s Russell said.

However, one of the primary opponents to the plan, Alberta, appears unconvinced. “Today’s announcement confirms our long-standing fear that Ottawa will proceed with changes to Canada’s securities regulation system without the support of two of its largest markets, Alberta and Quebec. This will leave Canada with a more fractured system than the one we have today,” said Doug Horner, Alberta’s minister of finance and president of Treasury Board, in a statement.

“We do not believe that four provinces constitute a critical mass of support for a change of this magnitude,” Horner added.

He noted that the Supreme Court of Canada “has ruled that securities regulation is a provincial jurisdiction, so Ottawa needs to respect provincial positions.”

“The federal government could have demonstrated that respect by sharing their amended agreement with all the provinces before making an announcement,” he added, noting that, “I find it interesting that the federal government has amended the original agreement in principle to garner the support of the smaller provinces.”

Among other things, the amended deal introduces two new deputy chief regulators to represent the interests of smaller provinces and territories, along with other changes designed to win favour with Saskatchewan and New Brunswick.

Alberta says that the arrangement would need further revisions to win its support. “Industry representatives in Alberta do not support the federal proposal, preferring a provincially-led approach instead, and the Alberta government has always been clear that it would have to see some major changes before it would considering signing on,” Horner said.

In the meantime, Horner noted that it will continue working to improve the existing system.