Feds, B. C. and Ontario agree to establish co- operative securities regulator

OTTAWA — The Conservative government that bulled ahead with unilateral changes to federalprovincial health funding and jobtraining programs is hoping a more “co- operative” approach will pay dividends for a national securities regulator.

Finance Minister Jim Flaherty, flanked by his provincial counterparts from B. C. and Ontario, announced Thursday they’ve agreed to proceed with a national body to oversee Canada’s investment industry.

They hope to have the proposed system in place by July 1, 2015.

“Our economic union stands taller today than it did yesterday,” said Flaherty, even as he invited other provinces and territories to join the “co- operative.”

“It isn’t a federal regulator or a provincial regulator,” said Flaherty.

“It’s a common regulator, a cooperative regulator, which will share whatever powers the different orders of government have.”

Quebec, as expected, immediately signalled its opposition, while Alberta, another longtime opponent of the idea, kept its powder dry while complaining about the lack of consultation.

Flaherty and Ontario, home to the Toronto Stock Exchange, have long sought a national securities regulator to replace the current patchwork of provincial and territorial bodies. However, in 2011, the Supreme Court ruled Ottawa could not unilaterally create such a system because it intruded on provincial jurisdiction.

Tortuous, years- long negotiations with B. C. and Ontario — which together represent almost two thirds of the Canadian securities market — resulted in the proposal Thursday.

The new regulator, which will have a head office in Toronto, will administer a single set of regulations and be directed by a board of independent directors chosen by a federal- provincial council of ministers.

“It doesn’t make sense in a nation the size of our population to have 13 regulators and to introduce yet possibly another federal regulator with all the others included,” said Charles Sousa, Ontario’s finance minister.

“( That) would create, I think, an international or reputational signal that would say, you know, we don’t have our act together.”

B. C. Finance Minister Michael de Jong said the co- operative model was designed to avoid constitutional court battles.

“My apologies to the constitutional bar,” said de Jong.