High court ruling paves way for national regulator
The Supreme Court of Canada has ruled that a plan to create a national securities regulator that includes British Columbia is constitutional.
B.C. has previously taken a lead in efforts to create a multi-provincial capital markets regulator, but provincial Finance Minister Carole James had a cautious reaction Friday to the high court ruling that could open the way to implementing a new cooperative system.
“Our government’s first priority is to protect the people of British Columbia. We believe there are opportunities for B.C. in a Canada-wide approach to these types of capital market protections and regulations. But we also know that we need to move ahead on our priority of getting white-collar crime out of B.C.,” James said in a written statement.
James said the province will take time to review and analyze the court’s findings.
Canada is the only major industrialized country without a national securities regulator. Instead, each province and territory has its own securities laws and oversight body. Supporters of the national concept say it would eliminate duplication, reduce red tape and ensure more consistent enforcement and investor protection.
James pointed to efforts the B.C. NDP government, which took power in 2017 with support of the Green party after 16 years of B.C. Liberal rule, already has underway to tackle white-collar crime. The government has taken aim at money laundering in casinos, made changes to uncover beneficial ownership of property, and launched a panel on money laundering in real estate.
James has also ordered the B.C. Securities Commission to improve its penalty collection record and improve enforcement of financial fraudsters, and also promised provincial changes to improve both.
The action followed a Postmedia investigation that found more than half a billion dollars in securities commission penalties had gone uncollected in the past decade and that criminal prosecutions were a rarity. Another 2017 Postmedia investigation uncovered money laundering in B.C. casinos.
Said James: “White-collar crime is not an easy problem to fix. But after years of neglect, our government is rolling up our sleeves to make sure people’s investments are protected and (we are) continuing the important work of modernizing our securities regulator and improving their enforcement powers.”
The effort to put a national regulator in place goes back half a century. Work on the latest iteration, the cooperative capital markets regulatory system, began in 2013.
Participants include Ontario, Saskatchewan, New Brunswick, Prince Edward Island and Yukon, as well as the federal government.
Alberta and Quebec have been opponents, with Quebec launching a legal challenge that gave it a partial victory, which the federal government appealed to the Supreme Court of Canada.
The new cooperative regulatory system was supposed to roll out this year, but the timing has been in question, in part, because of the legal challenges.
What are the next steps, or when they might happen, is unclear.
The B.C. Securities Commission, which is involved in the move to the new system, did not reply Friday to a request for comment.
The federal government said Friday it will also review the decision carefully.
Discussions with participating provinces to develop a cooperative system will continue, Finance Ministry spokesman Pierre- Olivier Herbert said in a written statement.
Ottawa will also pursue discussions with provinces and territories that are opposed to the cooperative system “to ensure that views and concerns continue to be shared and addressed,” said Herbert.
The move to the cooperative system includes a common regulator, a council of ministers to play a supervisory role, a model law that provinces and territories could pass, and federal legislation to manage systemic risk, allow for data collection and address criminal matters.