Saskatchewan and New Brunswick are joining British Columbia and Ontario in Ottawa's proposal to create a single national securities regulator that would be fully operational by the fall of 2015, federal Finance Minister Joe Oliver announced today.
"Today is a landmark day as the Cooperative Capital Markets Regulatory System gains two valuable new members ... into this nation building project," Oliver told said.
Justice Ministers Troy Lifford of New Brunswick and Gordon Wyant of Saskatchewan were in Ottawa for the announcement, alongside Finance Ministers Charles Sousa of Ontario and Mike De Jong of B.C.
Although the two provinces only add approximately three or four per cent of the country's total market capitalization, it is a symbolic victory for promoters of the single regulator because there is now a subscribing province from every region.
"Together, Ontario, B.C., Saskatchewan and New Brunswick represent more than half of the market capitalization of the listed Canadian companies on the TSX and TSX Venture," Oliver said.
To secure their participation, Ottawa promised Saskatchewan and New Brunswick some concessions, including a cash payment equivalent to the five years worth of net revenues the provinces would have brought in had they continued operating their own regulators.
Alberta, Quebec hold out
Wednesday's announcement leaves six provinces out of Ottawa's plan with Alberta and Quebec as the key holdouts, putting into question the effectiveness of a single Canadian securities regulator.
Oliver refused to speculate what would happen if Ottawa does not get all the provinces and territories to buy into the plan before 2015.
But Sousa was more direct, saying "unanimous consent" had been "the stumbling block" throughout negotiations over the last 50 years.
"Let's not look at unanimous support right away; let's look at how we can achieve the added support long term.
"And if there are provinces that don't participate, well they don't. In the meantime, we will continue to advocate for the benefit of companies, the businesses, the investors, the protection mechanisms necessary to make Canada ultimately more competitive."
Oliver said the federal government would do its part to make their participation easier, adding that "whether they participate or not, their interests will not be undermined."
Door open or shut?
The proposal for a voluntary securities regulator is being billed to the provinces who remain opposed to the new system as an agreement that would not encroach on provincial jurisdiction and respect a ruling by the Supreme Court of Canada.
De Jong described it as "an agreement in principle that respects the constitutional division of powers in this country and is also mindful of the pronouncements of the highest court in the land and the legitimate need to address issues related to systemic risk."
But on Wednesday, Quebec Liberal Finance Minister Carlos Leitao reiterated his government's opposition to a common securities regulator, calling it "an unnecessary structure."
Quebec Intergovernmental Affairs Minister Jean-Marc Fournier added that the Supreme Court's decision "shut both the front door and back door" to a federally imposed regulator.
The federal government had tried to create a national regulator before, but the Supreme Court ruled in December 2011 that it would be unconstitutional.
The top court said Ottawa's plan would tread on provincial legal jurisdiction, but didn't close the door to a future "co-operative approach" to creating a national body.
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