National Securities regulator back on the table

Finance Minister Jim Flaherty is interviewed following the delivery of the budget on Parliament Hill in Ottawa March 29, 2012. REUTERS/Patrick Doyle

Yesterday’s federal budget was seen by many as a positive sign that the Federal government is investing in Canada’s long term economic growth. And one thing that would improve Canada’s economic growth, according to Finance Minister Jim Flaherty, is a national securities regulator. The federal government has indicated that their loss at the Supreme Court last December does not mean they have given up on a national securities regulator.

But could such a body be created without running afoul of the limitations set by the top court?

According to Anita Anand, a professor at the University of Toronto’s Faculty of Law, Flaherty is not out to lunch:

It is by all means possible for the federal government to move ahead on this basis especially given the wording of the Supreme Court’s judgment which explicitly identifies that a cooperative strategy may lead to the creation of this regulator.  I understand that a number of provincial and territorial jurisdictions have reiterated their interest in working together on this basis. Furthermore, such a regulator would have the constitutional authority to oversee issues relating to systemic risk, as indicated in the Court’s judgment. The regulator could oversee federal criminal enforcement in securities as the criminal law rests within federal constitutional powers in any case. Thus, without question, there is potential for the creation of a broad-based regulator in this area. Whether it will be a “national” or “common” securities regulator, and what the difference between these terms is, remains to be seen.

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