Saskatchewan to join ‘co-operative’ regulator
Quebec, Alberta oppose national market oversight
OTTAWA — Few issues have divided Canadian policymakers so deeply and as long as the debate over who should regulate the country’s financial markets and, ultimately, what region would benefit.
Joe Oliver, the federal financial minister, inherited the issue of a national securities watchdog from the late Jim Flaherty, who since the Conservatives came to office in 2006 had been pushing the provinces and territories to think beyond their borders and buy into the need for a single body to oversee the current patchwork of 13 regulators.
Until now, only Ontario and British Columbia have signed up for Ottawa’s proposed Co-operative Capital Markets Regulator (CCMR), officially unveiled by Flaherty last fall.
But on Wednesday, Oliver will attempt to move that process forward, announcing Saskatchewan will also join the fledgling CCMR, according to sources.
Possibly one or more of the Atlantic provinces will come on board, as well.
Even with just one province agreeing to participate, the federal government will have the “critical mass” of regional support to go ahead with the CCMR, said Ian Russell, president and CEO of the Investment Industry Association of Canada.
“You need at least three provinces to give you the critical mass that you need. And that would give you virtually 50 per cent of the capital markets,” Russell said.
“There have been rumours for some time that at least one or two Atlantic Canada provinces have been leaning towards joining the co-operative regulator,” he added. “So, it may not be just Saskatchewan.”
Ottawa’s efforts to create a single national regulator were stalled by a Supreme Court ruling in 2011 that said such regulator bodies were a provincial jurisdiction. But the country’s highest court said Ottawa could attempt to reach a consensus for cooperation with the provinces on a national regulator.
“This is still a work in progress by the new participating provinces,” Russell said. “But clearly, there has been a lot of work done on this agreement in principle between and Ontario and B.C. and the federal government. So, there will at least be, perhaps, some (further) discussion of what issues need to be addressed in terms of governance.”
Last month, Oliver said a national regulator could be up and running by the next federal election, scheduled for the fall of 2015.
“I think it is very positive that Canada, British Columbia and Ontario entered into this agreement in principle” on a national regulator,” Joe Oliver said in an interview in Montreal, on the sidelines of the International Economic Forum of the Americas.
“We expecting there will be a number of other provinces coming on board soon,” he said. “I don’t use the word ‘soon’ unless I mean ‘soon’. The Ontario election (on June 12) obviously delayed the matter. But it really makes sense for everyone to join in.”
Ontario Finance Minister Charles Sousa and his B.C. counterpart, Michael de Jong, announced they were joining the single regulator to be based in Toronto in September.
Both Quebec and Alberta, along with Manitoba, which is also opposed to a national regulator, reaffirmed their positions.
“We’ve not changed our view and it’s always been pretty clear: We’ve always said it is a provincial jurisdiction,” said Andrée-Lyne Hallé, a spokeswoman for Quebec finance minister Carlos Leitao. “And I think the Supreme Court has supported that position.”
Jessica Jacobs-Mino, press secretary for Alberta Financial Minister Doug Horner, said the province’s position “hasn’t changed.”
Russell said Saskatchewan “is important, largely because of its growth prospects. It’s a province that has very large and growing and successful commodities corporation.”
“They will be important issuers in the capital markets. There will be a lot of corporate restructuring in Saskatchewan. And the market in Saskatchewan will grow,” he said. “It’s not so much that Atlantic Canada is important from a capital markets point of view as it is just to have five provinces, that’s nearly half, is probably a more satisfactory starting point.”