Capital markets: Quebec, Alberta remain opposed to CMRA
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