CALGARY, Alberta (Reuters) - The Canadian government’s plan to establish a single national securities watchdog is facing increasing opposition from the country’s provinces, many of whom are determined to keep their own regulators in place.
Alberta and Quebec have branded Finance Minister Jim Flaherty’s plan to bring the country’s fractured securities regulation system under federal control as an unwarranted expansion of Ottawa’s power.
Media reports on Thursday said Alberta is mulling the creation of a regional commission with the neighboring province of Saskatchewan. However Alberta denied it was considering the move and was happy with the country’s “passport system”, where a firm’s registration with one province is valid elsewhere.
“Our preference is for the current system,” said Bart Johnson, a spokesman for Alberta Finance Minister Ted Morton.
Ontario, the country’s business and financial center and the home of the Toronto Stock Exchange, supports the creation of an single regulator. However, other provinces are leaning toward the Alberta and Quebec position, which would see the 13 provinces and territories retain their own regulator.
Rosann Wowchuk, Manitoba’s finance minister, said on Thursday that her province is also opposed to the federal plan but is willing to talk to other provinces about alternatives.
“Our goal is to have a strong securities system,” she said. “I’ll talk to the minister of finance for Saskatchewan and Alberta and we’ll continue to work in the best interest of all of our jurisdictions.”
British Columbia has said it supports the creation of a single national regulator, but the head of the province’s independent securities regulator signaled this week it now has problems with the idea.
A national regulator might not pay enough attention to Canada’s small and venture capital markets, which have been the focus of British Columbia and Alberta regulators, said Paul Bourque, executive director of the British Columbia Securities Commission.
“We doubt that any national regulator would intentionally put any of this at risk. However, a national regulator is going to have its hands full on issues affecting primarily senior markets and participants in those markets,” Bourque told a Rotary Club in Kelowna, British Columbia.
Despite the opposition from some provinces, the federal government is proceeding with its plans for a national regulator, though it is awaiting a Supreme Court ruling on the constitutionality of the scheme.
“We at the federal government have moved the issue further down the field than ever before in the history of Canada, so we are the federal government that has accomplished more on this subject than any previous government. The matter is now referred to the courts,” Flaherty said.
“A couple of the provinces have taken a different position than the federal government and that’s their right ... The best road here is to take all of these 13 securities commissions and bring them into one national securities commission.”
Reporting by Scott Haggett, Alan Dowd, Rod Nickel and Jeffrey Hodgson