Paul Vieira in Ottawa and Barbara Shecter in Toronto
Thursday, November 20, 2008
Jim Flaherty, the Finance Minister, said yesterday Ottawa is forging
ahead with "willing" provinces to create a national securities regulator
because Canada's patchwork system remains flawed in the global context.
"[T]he flaw we have in our system is that we still have 13 securities
regulators. So we are going to go ahead and create a Canadian securities
regulator," Mr. Flaherty said following the Throne speech. "We are going
to do this with our willing partners -- which include some of the
provinces. Those who choose not to [work with Ottawa] will not join."
The Financial Post reported this week that the financial crisis has
helped the federal government to gather support for a new national
securities regulator from all the provinces except Quebec. Proponents
say a single national body, which has been 40 years in the making, would
reduce costs and bureaucracy
Supporters say it would also bolster Canada's international reputation.
"If we can't put this together now in these kinds of circumstances, then
I don't know when Canada will be able to do it," said Nancy Hughes
Anthony, president and chief executive of the Canadian Bankers
Association. "There are clear signals that we have to sharpen up our
regulatory system for all financial institutions and all financial
More specific details on how the single securities watchdog will operate
are to emerge in January, when an advisory panel headed by Tom Hockin, a
former Cabinet minister in Brian Mulroney's government, tables its
report laying out a legislative framework.
Sources told the Post the scheme Ottawa envisages would allow Quebec, a
longtime opponent of a single national securities regulator, to maintain
a separate and independent stock market watchdog.
Yesterday, Christian Paradis, the chief political minister for Quebec in
the Conservative government, said joining the national securities
regulator would be voluntary.
"We have to be clear this is not obligatory for anyone," said Mr.
Paradis, who is the Minister of Public Works. "Nothing will be imposed
on any province-- in any way, shape or form."
Sources who have closely tracked the recent moves toward a national
regulator say the federal government was wary of forcing Quebec to
because the province is in the midst of a provincial election campaign.
These people say Ottawa did not want to create a separatist backlash in
the province, which could cost Liberal Premier Jean Charest.
"That's exactly right," said longtime advocate Stephen Jarislowsky,
adding that the creation of a national regulator will put pressure on
Quebec to, ultimately, support it.
In time, "there will be less companies that will register in Quebec.
They'll just die on the vine and eventually they'll join it," said Mr.
Jarislowsky, who is chairman of Montreal-based Jarislowsky Fraser Ltd.,
one of Canada's largest independent investment management firms.
Ms. Hughes Anthony of the bankers' association agreed that a successful
national regulator could find support from provinces that don't
initially join. "Perhaps you have to put the model in place and have the
willing participants work with it to show the others that it doesn't
hurt," she said.
Over the four decades it has taken to get this close to a national
securities regulator, certain provinces have at various times supported
the move. But the most consistent opposition has been from British
Columbia, Alberta and Quebec.
However, last week, B. C. Premier Gordon Campbell's comments in a
broadcast interview suggested a more conciliatory tone. He referred to
"unprecedented times" that require "new thinking caps for the new