Supreme Court opens door to na­tional se­cu­ri­ties reg­u­la­tor

The Globe and Mail Metro (Ontario Edition) - - REPORT ON BUSINESS - TIM KI­LADZE SEAN FINE ALEXAN­DRA POSADZKI CAP­I­TAL MAR­KETS, B2

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.

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