Supreme Court opens door to national securities regulator
The fate of a unified, pan-Canadian securities regulator rests with provincial leaders after the Supreme Court of Canada unanimously endorsed legislation to create one.
The question now is whether there remains the political will to finish the project, a quest that goes back to 1935.
On Friday, the Supreme Court gave its blessing for a pan-Canadian regulator, which would govern the country’s financial industry, to be known as the Capital Markets Regulatory Authority (CMRA). Canada is the only Group of 20 country that does not have a national securities regulator. Its proponents have struggled to create one for decades because of political tension between the provinces and Ottawa, as well as the intricacies of the country’s constitutional law.
The momentum to create a national regulator picked up 10 years ago, but in 2011, the Supreme Court rejected Ottawa’s plan for one, saying the federal government had overstepped its authority. However, it left the door open to a more co-operative approach with the provinces.
A new proposal was drafted in 2013, and its supporters have made significant headway since – most notably, clearing the Supreme Court on Friday. However, the key political leaders that created the current plan are no longer in office. The late federal finance minister Jim Flaherty used to be one of project’s biggest, and most influential, backers.
While the ruling “confirms that the legal framework, including the governance regime that was directed by the first Supreme Court reference, has a sound constitutional basis,” Lawrence Ritchie, a partner at Osler Hoskin & Harcourt LLP, said in an interview. “What now needs to follow is the political will of the participants to get it past the finish line.”
The question now is whether there remains the political will.