Cap­i­tal mar­kets: Que­bec, Al­berta re­main op­posed to CMRA

The Globe and Mail Metro (Ontario Edition) - - REPORT ON BUSINESS -

Echo­ing this sen­ti­ment, Ed Waitzer, a part­ner and head of the cor­po­rate-gov­er­nance group at Stike­man El­liot LLP, said “it will be in­ter­est­ing to see if any of our cur­rent lead­ers are pre­pared to ex­pend the po­lit­i­cal cap­i­tal that will be re­quired to move this for­ward de­ci­sively.”

The ar­gu­ment for a na­tional reg­u­la­tor is that it will make se­cu­ri­ties rules more con­sis­tent across the coun­try, which will help reg­u­la­tors pool their re­sources for en­force­ment ac­tions, while re­mov­ing red tape for busi­nesses, which must now abide by, and file doc­u­ments with, a patch­work of prov­inces and ter­ri­to­ries.

A uni­fied reg­u­la­tor would also sim­plify pol­icy de­ci­sion-mak­ing. Un­der the sta­tus quo, each ju­ris­dic­tion has an equal voice and de­ci­sions are made by con­sen­sus, not by ma­jor­ity votes.

The pro­posed CMRA is sup­ported by five prov­inces and one ter­ri­tory – On­tario, British Columbia, Saskatchewan, Prince Ed­ward Is­land, New Brunswick and Yukon. Ot­tawa has also backed the idea. The prov­inces must now each en­act a uni­form Cap­i­tal Mar­kets Act, which har­mo­nizes cap­i­tal-mar­kets laws, as well as a Cap­i­tal Mar­kets Reg­u­la­tory Au­thor­ity Act, which cre­ates the reg­u­la­tor. The fed­eral gov­ern­ment, mean- while, must en act the Cap­i­tal Mar­kets Sta­bil­ity Act, which ad­dresses sys­temic risk in Canada’ s cap­i­tal mar­kets and cre­ates new crim­i­nal of­fences re­lated to cap­i­tal mar­kets.

Be­fore Fri­day’s rul­ing, On­tario and B.C. had said lit­tle about their cur­rent po­si­tions. After so many years of de­lays the pro­posal ar­guably seemed likely to die.

But shortly after the rul­ing, On­tario voiced its sup­port. In a state­ment on Fri­day, a spokesper­son for Fi­nance Min­is­ter Vic Fedeli said the prov­ince is “pleased” with the rul­ing and is “com­mit­ted to work­ing with the other par­tic­i­pat­ing ju­ris­dic­tions to­wards the launch of the sys­tem.”

British Columbia also of­fered its sup­port – al­beit in a more muted tone. “We be­lieve there are op­por­tu­ni­ties for B.C. in a Canadaw­ide ap­proach to these types of cap­i­tal-mar­ket pro­tec­tions and reg­u­la­tions,” spokes­woman Sonja Zoe ll erina ne-mail .“But we also know that we need to move ahead on our pri­or­ity of get­ting white-col­lar crime out of B.C.”

Que­bec and Al­berta op­pose the plan, which is struc­tured as a co-op­er­a­tive agency run by the prov­inces and ter­ri­to­ries that choose to opt in. Over­seen by a coun­cil of min­is­ters from each par­tic­i­pat­ing ju­ris­dic­tion, this pan-Cana­dian ap­proach was crafted to en­sure the prov­inces do not cede power to Ot­tawa.

After the plan was pro­posed in 2013, the Que­bec gov­ern­ment re­ferred it to the Que­bec Court of Ap­peal, which ruled it un­con­sti­tu­tional be­cause the coun­cil of min­is­ters in­ter­fered with pro­vin­cial rights, by giv­ing an ex­ter­nal body con­trol over pro­vin­cial law, and fed­eral rights, by giv­ing prov­inces a veto over fed­eral law.

The Supreme Court dis­agreed. The court stressed that its opin­ion does not oblige prov­inces to par­tic­i­pate nor deal with prob­lems that may oc­cur when and if the reg­u­la­tor is run­ning.

Que­bec re­mains op­posed and, in a state­ment on Fri­day, Fi­nance Min­is­ter Éric Gi­rard said the prov­ince in­tends “to re­tain our au­ton­omy and keep our ex­per­tise in Québec.”

Al­berta is­sued a state­ment on Fri­day re­it­er­at­ing its be­lief in the im­por­tance hav­ing a lo­cal reg­u­la­tor that un­der­stands the com­plex­i­ties of the prov­ince’s mar­ket. How­ever, a pro­vin­cial elec­tion is sched­uled for May, 2019, which could change Al­berta’s stand.

With­out Al­berta, two of the four largest prov­inces are not in­volved. “If Al­berta’s not in it, I’m not sure it’s worth the ef­fort,” Ralph Shay, a for­mer direc­tor of the On­tario Se­cu­ri­ties Com­mis­sion and pre­vi­ous head of Cana­dian se­cu­ri­ties law at Den­tons LLP, said in an in­ter­view.

If Al­berta’s not in it, I’m not sure it’s worth the ef­fort. RALPH SHAY FOR­MER DIREC­TOR OF THE ON­TARIO SE­CU­RI­TIES COM­MIS­SION


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