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Doubt over Canadian securities authority

Friday 26 November 2010 – by Will Henley

The government of Canada’s plan to introduce a federal securities regulator in place of a network of regional bodies is facing an uphill battle amid opposition by provincial authorities.

Alberta officials have been forced to deny reports that the province is on the cusp of proposing a rival securities agency encompassing neighbouring Saskatchewan.

A spokesman however admitted that it preferred the “current system” where companies approved in one jurisdiction can “passport in” to another without the need for federal oversight.

Jim Flaherty, Canada’s federal finance minister, who has made the federal regulator a personal project, on Monday described the country’s disparate financial system of 13 separate securities regulators as “an embarrassment for Canada around the world”.

“We are the only industrialised country in the world without a national securities regulator,” the minister told the House of Commons Finance Committee.

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A Canadian Securities Act drafted by Flaherty’s department has been referred to the country’s Supreme Court as question marks hang over whether the government has the constitutional authority to establish a federal regulator.

Flaherty insisted the legislation was constitutional, but conceded that provinces have the option to take part in the federal securities regime.

Ted Morton, finance minister of Alberta, earlier in the week appeared to back the idea of creation of a Western Canadian securities regulator.

“It would make much more sense for Saskatchewan and Alberta to have a single commission,” he said in an interview.

Manitoba’s finance minister also yesterday revealed her opposition to the federal plan.

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