Ottawa to send securities regulator bill to Supreme Court soon: Flaherty

Date: Wednesday, May 5, 2010
Author: Investment Executive

Finance Minister Jim Flaherty says he will have a draft bill on a new national securities regulator ready to send to Parliament and for a Supreme Court reference in a matter of weeks.

Flaherty has committed to seeking the Supreme Court’s judgment on whether Ottawa has the constitutional power to enact such legislation after Quebec and Alberta objected.

The issue is also going to court in Quebec, where the provincial government, supported by Alberta, has challenged Ottawa’s authority to intervene on what the two governments believe is provincial jurisdiction.

Federal governments have sought to create a national security regulator for years, but it has always ground to a half over provincial sensitivities and suspicions the new national office would be dominated by Ontario.

Flaherty, however, appears to be closest to making the project come to reality.

Should it obtain the green light from the top court, Ottawa says it can have a national regulator up and running in three years even if Quebec and Alberta decide not to join.

In March’s budget, Flaherty projected that the draft bill would be tabled in Parliament this spring, and that the Canadian Securities Transition Office would deliver an organizational and administrative transition plan during the summer. Monday’s statements suggest the project is on schedule.

Flaherty said Monday the draft bill is actually just days from being completed internally, and would be tabled in Parliament “in a matter of weeks.”

Speaking to reporters and in a speech in Cambridge, Ont., Flaherty gave another reason why a national regulator -- as opposed to the current system of 13 separate provincial and territorial offices -- is needed.

The minister said his government is unable to act as the U.S. has done in investigating and charging Goldman Sachs with fraud in how it sold and packaged certain securities. Other countries, in particular Britain and Germany, have also said they would look at how the investment firm operated within their jurisdictions.

“This is one of the challenges I have in the Canadian situation,” he told reporters. “We have Canadian securities regulators now that are provincial and so it’s a provincial responsibility.”

Still, he said he would be surprised if the Ontario Securities Commission “was not engaged” in the subject.