Que­bec, Al­berta fail to stop new se­cu­ri­ties regime

Supreme Court dis­misses chal­lenge to na­tional reg­u­la­tor

Stockwatch Daily - - FRONT PAGE - By Mike Caswell

THE SUPREME Court of Canada has ruled in favour of pro­posed laws that would en­able a na­tional se­cu­ri­ties reg­u­la­tor. The court has de­ter­mined that the laws are within Par­lia­ment’s au­thor­ity and are al­low­able un­der the Con­sti­tu­tion. This is largely be­cause the na­tional reg­u­la­tor and its rules would not be bind­ing on the provinces, at least from a le­gal per­spec­tive. The de­ci­sion is a loss for the provinces of Que­bec and Al­berta, which op­pose a na­tional reg­u­la­tor and had chal­lenged the pro­posed laws on con­sti­tu­tional grounds. They con­tended that the laws in­fringed on the rights of the provinces to set their own rules. The na­tional reg­u­la­tor would have the ef­fect of “fet­ter­ing the sovereignty” of par­tic­i­pat­ing provinces, they com­plained.

The Supreme Court, how­ever, has ruled com­pletely against them. In a de­ci­sion re­leased on Fri­day, Nov. 9, the court has de­ter­mined that un­der the pro­posed na­tional reg­u­la­tor, the provinces will still con­trol their se­cu­ri­ties rules. While the provinces may be com­pelled by po­lit­i­cal

or other rea­sons to fol­low the guide­lines set down fed­er­ally, from a le­gal per­spec­tive they would al­ways have the op­tion to make their own laws. Fri­day’s de­ci­sion is a step to­ward a na­tional reg­u­la­tor, but it does not com­pel any provinces to join the plan. Que­bec and Al­berta will be free to re­tain their pro­vin­cial se­cu­ri­ties com­mis­sions. Like­wise, the other provinces will be free to join the na­tional plan. So far, On­tario and B.C. are the main pro­po­nents of a na­tional reg­u­la­tor, although many oth­ers (Saskatchewan, New Brunswick, Prince Ed­ward Is­land and Yukon) have stated sup­port for the idea. The court case cen­tred around the way that the se­cu­ri­ties laws would be de­ter­mined un­der the pro­posed na­tional reg­u­la­tor. Re­spon­si­bil­ity for se­cu­ri­ties laws would fall to a coun­cil of min­is­ters. The mem­bers of this coun­cil would be the fed­eral Min­is­ter of Fi­nance and his coun­ter­parts from the par­tic­i­pat­ing provinces. Amend­ments to the law would go to a vote, and would re­quire ap­proval from at least 50 per cent of the mem­bers. (At present, the coun­cil would only com­prise the fed­eral Min­is­ter of Fi­nance and rep­re­sen­ta­tives from B.C. and On­tario, as those are the only ju­ris­dic­tions that have signed on to the plan.)

Much of the com­plaint from Que­bec and Al­berta had to do with the fact that the coun­cil would be de­ter­min­ing their se­cu­ri­ties laws if they were to opt into this plan. As they saw things, they could find them­selves shut out of changes to their se­cu­ri­ties laws. If they were op­posed a par­tic­u­lar amend­ment, that amend­ment could still pass if a suf­fi­cient num­ber of the other provinces ap­proved it. This could leave Al­berta or Que­bec hav­ing to adopt changes to their se­cu­ri­ties rules that they did not de­ter­mine.

As the Supreme Court sees things, this is sim­ply not the case. Legally speak­ing, the

new laws would not be bind­ing on any prov­ince. The leg­is­la­ture of each par­tic­i­pat­ing prov­ince would re­main free to re­ject the pro­posed laws and any amend­ments to them. The Supreme Court was care­ful to dis­tin­guish the le­gal ef­fect of the pro­posed laws from what may oc­cur in the po­lit­i­cal arena. The po­lit­i­cal ob­jec­tive is, of course, to cre­ate a uni­fied set of se­cu­ri­ties rules. Each prov ince t hat signs on would have to agree to adopt the pro­posed rules and any amend­ments that fol­low. Th­ese provinces would also have to dis­solve their re­spec­tive se­cu­ri­ties com­mis­sions and merge them into a na­tional struc­ture. This would make it dif­fi­cult for th­ese provinces to ex­tri­cate them­selves from the na­tional reg­u­la­tor. From a le­gal per­spec­tive, how­ever, the provinces would still re­tain the abil­ity to leave and the abil­ity to make their own se­cu­ri­ties rules, the court de­ter­mined.

As with most court de­ci­sions that end up at the Supreme Court level (and par­tic­u­larly those that deal with con­sti­tu­tional is­sues), most of the 90-page de­ci­sion is de­voted to a lengthy le­gal anal­y­sis, along with the ac­com­pa­ny­ing bar­rage of legalese. The word “con­sti­tu­tion” ap­pears 137 times in the rul­ing. The word “leg­isla­tive” is in 49 places, while “statute” is in 49 places.

The num­ber of lawyers in­volved is also an im­pres­sive 18, a fig­ure that or­di­nary court rooms would strug­gle to ac­com­mo­date. The at­tor­ney gen­er­als of Canada, Que­bec, B.C. On­tario, New Brunswick, Man­i­toba, Prince Ed­ward Is­land, Saskatchewan, Al­berta and Que­bec all sent rep­re­sen­ta­tives. Also present was the In­sti­tute for Gov­er­nance of Pri­vate and Pub­lic Or­ga­ni­za­tions. (The IGOPP, for short, is an or­ga­ni­za­tion that ex­am­ines ex­ec­u­tive com­pen­sa­tion, the in­de­pen­dence of board mem­bers and the use of dual class share struc­tures.) The case was heard on March 22, 2018, by all nine Supreme Court judges.


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