‘WE’RE NOT GOING TO BE BULLIED’
ALBERTA AGAINST NATIONAL REGULATOR
Alberta remains staunchly opposed to the federal push to create a national securities regulator, provincial Finance Minister Doug Horner said Wednesday.
While New Brunswick and Saskatchewan — in addition to original members Ontario and British Columbia — are ready to sign on to the Harper government’s proposal to create one unified securities watchdog, Horner said Alberta’s position has not changed.
“Very simply, the federal government does not have jurisdiction over regulatory affairs in terms of securities regulations,” he said. “We’re not going to be bullied into signing something that’s not right for Alberta.”
The four provinces now on board with the federal plan represent about three-quarters of Canadian listed companies, with a market capitalization of 53 per cent of the total. Federal Finance Minister Joe Oliver has set up a timetable to have a new national regulator of financial markets in place by the fall of 2015.
But Quebec and Alberta are still significant holdouts. Horner said a national regulator would unnecessarily complicate a regulatory system that is working just fine. He added it could also result in Alberta losing jobs from its growing financial sector to Ontario, where the national body would be headquartered.
“Obviously our fear is that this is what’s eventually going to happen — you’re going to start to draw the lawyers, the financial experts, they’re going to go where the decisions are being made,” Horner said.
Wildrose opposition finance critic Rob Anderson said he agrees with Horner “100 per cent,” adding Alberta should not be giving up its jurisdictional powers on important issues.
“Alberta has its own unique needs, and I’m not comfortable ceding our authority over securities regulation to a federal government that frankly, depending on who is in charge, may or may not be a friend to Alberta,” Anderson said.
Oliver — a former executive director of the Ontario Securities Commission and head of the Investment Dealers Association of Canada — said he has witnessed first-hand the “inefficiency” of the current system, which is a patchwork of 13 provincial and territorial agencies. Oliver’s predecessor Jim Flaherty was also a supporter of a national regulator, and had championed the initiative since the Conservative government came to power in 2006.
Industry groups also support the proposal. The Investment Industry Association of Canada hailed Wednesday’s news that Saskatchewan and New Brunswick are on board, saying it “signals an end to the archaic and fragmented patchwork.”
John Manley of the Canadian Council of Chief Executives called it a major step forward and the Canadian Bankers Association called on other provinces to join in.
Horner said Alberta has tried to address some of Ottawa’s complaints about the current system by pitching its own proposal — one that would create a new national enforcement agency as well as a national systemic risk committee made up of all 13 regulators and chaired by the federal minister.
That proposal would have strengthened the current regulatory regime but still allowed the provinces the control they need “to build their own economies,” Horner said.
But so far, the federal government appears uninterested. “We have not heard a response from them on the Alberta proposal,” Horner said.
Progressive Conservative leadership candidate Jim Prentice was a vocal supporter of a move to a single regulator during his time as a federal cabinet minister. But Prentice said Wednesday that while he still believes a unified national regulator could be a good thing, he doesn’t believe the federal government has found a way to do it yet.
“What I don’t support is if we have an Ontario regulator regulating the Alberta energy industry. That’s what we have to be careful of,” Prentice said in a meeting with the Herald’s editorial board.
“If we cut off our access to capital markets for our energy sector, it will have a very significant impact on prosperity in this province.”
In December 2011, the Supreme Court ruled that oversight of stock exchanges and other financial markets falls under the jurisdictional control of the provinces.
But Oliver and the four supportive provincial ministers said Wednesday that the new system will demonstrate provincial jurisdiction and respect regional differences. They said they still hope the holdout provinces will come on board, but even if they don’t, the initiative will go ahead.
Ian Russell, president of the Investment Industry Association of Canada, said he believes it is only a matter of time before most other provinces join in, especially once the new office begins functioning. “You suddenly are introducing a uniform securities act with detailed regulations ... that will encompass at least 50 or 60 per cent of the Canadian capital markets,” Russell said.
“It will only be a short matter of time before most of the other provinces will come in because there’s too many efficiencies to gain by coming in and too much efficiency lost by staying out.” Russell said a national or common regulator would do more than oversee stock markets.
The office would also police debt markets and oversee institutional traders, high-frequency traders, new bond and equity issues and disclosure relationships between invest- ment advisers and their clients. “And for the first time we will have a regulator that will represent Canada internationally,” he pointed out.
The Alberta Investors Protection Group — an organization that works to help victims of investment scams, fraud, and misconduct — said it would support a national securities watchdog, but only if it has teeth.
“It has got to be a committed public protector,” spokesman Larry Elford said. “We don’t have a lot of confidence in the Alberta Securities Commission at all.”