The discussion on everything related to Canada’s proposed national securities regulator has heated up — from where it should be headquartered to whether Ottawa even has a constitutional right to take over regulating securities from the provinces. Each party involved in this debate has its own priorities. The provinces are trying to protect what they see as their rights, local jobs, and income streams. The federal government wants a more streamlined process. And both sides say they want to protect the interests of the business community and the public at large.
The fact is Canada is the only country in the Western world to offer a geography-based patchwork of regulators. Regionalism might have worked in the past, but it doesn’t stand up well to new realities in a global economy. When companies want to raise money in different provinces they want to be ruled by one book, not 13 written by different provinces and territories. And most public companies would welcome the simpler approach to securities law provided by a single regulator. This is one country. It is high time for it to have a single securities regulator. And if things go according to the federal government’s plan, it will. The proposed Canadian securities act, which the federal government released in May, is mostly based on the provinces’ own regulations, and the federal government was very careful in the wording to make sure the act would stand up to constitutional challenges in court. Those challenges come from Alberta and Quebec, which strongly oppose the idea of a federal regulator. But other provinces are likely to join in any constitutional discussions since they too want to protect their interests.
The federal government also seems willing to keep a lot of the same provincial regulatory structures in place as long as they work under a unified system, which makes the debate about where the headquarters of the new national regulator would be based less relevant.
At the end of the day, everyone — whether businesses, the federal government, or the provinces — is “Looking for certainty,” as our cover story by Helen Burnett-Nichols points out on page 18, and that should be the top priority as the national regulator is established over the next couple of years.
But that is not the only heated debate covered in this issue. In “Finding the right approach,” on page 26, Robert Todd reports on the battle to streamline regulations and practices on drug and alcohol testing in the workplace.
In closing, I’d like to add a few words about the economy, which has lost some of its steam over the past couple of months. That’s the case particularly in the United States, where growth forecasts have been slashed. A sluggish recovery and persistent high unemployment south of the border do not bode well for Canada either, as the two economies are strongly linked. Only time will tell how a bad U.S. economy will affect Canada in the long term. But we will deal more in length with this topic in the next edition of InHouse, which deals with cross-border issues.