TORONTO (Reuters) - Alberta wants individual provinces to retain their authority over Canadian securities regulation, a position that makes federal attempts to create a single, national body more difficult, although Alberta is willing to make some adjustments in the current system.
The province’s finance minister, Doug Horner, said Alberta was happy to discuss greater cooperation with Ottawa, especially in the realm of systemic risk. But the energy-rich province, which is seen as a key player in creating the critical mass of support that would pave the way for a national regulator, is not about to dismantle its own financial watchdog.
“We’re talking about a collaborative system. It isn’t that we’re going to go to a common securities regulator and have one office somewhere,” Horner said in an interview on Wednesday. “That’s been pretty much off the table for provinces for some time.”
Canada, alone among the Group of Seven rich industrialized countries, has a network of 13 provincial and territorial securities regulators rather than a single national body.
International investors view the system as inefficient and prone to duplication, especially for a company seeking to raise capital in several provinces.
But provinces like Alberta and independence-minded Quebec don’t want change. The Supreme Court of Canada backed the provincial line in a 2011 ruling that said a previous plan to impose a national regulator was unconstitutional.
In his 2013 budget, released earlier this month, federal Finance Minister Jim Flaherty said Ottawa would still prefer to cooperate with the provinces to establish a common watchdog.
If that didn’t work, he would push ahead with legislation giving Ottawa powers to curb systemic risk in capital markets.
But Horner dismissed the idea of a central regulator and said provincial finance ministers who met in Montreal on Monday wanted instead to consider improvements to an existing “passport” system.
That would, for example, create common rules across jurisdictions and ensure corporate filings need be done only once, and in the province that makes the most sense.
“We recognize that there’s some things we need to change,” he said. “Do we need to get rid of what we have and go to a national securities regulator and give up our sovereign right to manage that? No. And we won‘t.”
Horner said a go-it-alone approach by the federal government could risk further legal wrangling if it moves too aggressively into areas seen as part of the provinces’ purview, a fee-creating boon for lawyers rather than investors.
Ontario, home to most of the biggest companies listed in Canada, is solidly in support of a national regulator while opposition is most strident in Quebec, which is home to Canada’s main derivatives exchange.
British Columbia and Alberta began expressing more openness to the idea last year, raising hopes the pair plus Ontario could create a critical mass of support that would persuade other provinces to come on board as well.
But Horner said Alberta was protective of its energy and agriculture industries and would want to handle offerings for junior and midcaps companies in those fields.
“That expertise, that resource, that strength, needs to be maintained in Alberta because that’s where the industry is,” he said.
Additional reporting by Euan Rocha; Editing by Janet Guttsman and Leslie Adler