The Supreme Court ruled today that the Canadian Constitution does not authorize Parliament to pass the Proposed Canadian Securities Act as presently drafted (Proposed Act). The federal government had asked the Supreme Court of Canada to rule on the constitutionality of the Proposed Act, which sought to establish a national securities regulatory system. The governments of Quebec and Alberta challenged the federal government’s authority under the Constitution Act, 1867 over the matters covered by the Proposed Act. In a unanimous judgment, the Court found that the Proposed Act, as submitted, was not valid and was not within Parliament’s constitutional powers respecting trade and commerce or criminal law.

The reasons made public today recognize that the federal Parliament could validly regulate certain structural aspects of the Canadian securities market as a whole that may transcend provincial regulation (such as management of systemic risk and national data collection). The Court ruled, however, that, in its current form, the Proposed Act is too broad and seeks to regulate aspects of securities trading that are within the spheres of provincial jurisdiction.

The reasons for the ruling are available at the following Internet address under Reference Re Securities Act:

The Proposed Act is available at the following Internet address: