In our last issue we reported that the federal government had set up the Canadian Securities Transition Office to lead the charge to establish a single Canadian regulator of the securities industry. Mr. Hyndman, the Chair and CEO of the Office, announced at that time that the provinces had each agreed to appoint a representative to a new advisory counsel to design and structure the details of the new national commission.
In fact, the debate is coming to a head, with several of the provinces refusing to appoint a representative to the advisory counsel. Worse still, the debate is polarising still further with the government of Québec’s reference to the Québec Court of Appeal to determine if the Parliament of Canada has the constitutional authority to infringe on a jurisdiction, that to date, has been accepted as a provincial jurisdiction. In response to this move, the federal government upped the ante by asking the same question to the Supreme Court of Canada, perhaps with the intention of taking the wind out of Québec’s initiative. New Brunswick then joined the mêlée by announcing that it intended to defend its jurisdiction in matters of securities regulation and would intervene in the matter, and Alberta has indicated that it will make its own reference to its Court of Appeal and intervene in the Québec reference.
Québec has indicated that it is not cowed by the federal government’s latest move and has no intention of stepping down and withdrawing its reference to its own highest court.
It would appear that neither Québec nor the federal government intends losing its separate initiative in having recourse to the courts. The federal government could have simply waited until the Québec Court of Appeal rendered its decision and then appealed the decision, if unfavourable.
The real legal debate will be centred around whether the federal government has the constitutional power to regulate securities under the head of regulation of trade and commerce, perhaps not to the exclusion of the provinces but in parallel with them. Given the complexity of the issues and the fact that neither of the parties has yet filed its position with its respective court, it is difficult to anticipate when a judgment might be expected from either of these arenas.