I recently read an article in the Oct. 16 Calgary Herald by business columnist Deborah Yedlin entitled “It’s time to change structure of securities industry,” which was quickly responded to by William S. Rice, the chair of the Alberta Securities Commission (“We don’t need a national securities regulator,” – Oct. 26, also in the Herald).
As we all know, the federal government has been attempting to get the provinces to agree on replacing the several provincial securities regulators with one national security regulator for several years now.
In principle the proposal probably makes a lot of sense, however it is complicated by the fact that the Canadian constitution relegates the issue of securities regulation to the provinces. Herein lies the problem. Alberta and Québec have basically vetoed the idea of a single national regulator and the Supreme Court of Canada has supported the constitutional provisions relating to the autonomy of the provinces on the issue.
Apparently we are the only country in the industrialized world that does not have a national securities regulator and our share of the global securities market is less than three percent. Even though Alberta has the second largest share of the Canadian capital market our share relative to the global market remains minuscule. And, even then, given that Alberta’s concern about a national regulator seems to be centred on our energy industry, the capital market for that industry these days may be centred in Calgary but in reality draws money from the global marketplace. Just look at the number of major foreign investments we have recently seen in the energy industry.
The federal government is now looking towards a more co-operative model for a national regulator.
Canadians have accomplished many great institutions by working together in the national interest. We can build strong and effective institutions outside the realm of government. The Canadian Securities Administration is one of many examples of national organizations that have been created at arms’ length from government and often with the primary intent of dealing effectively with government regulatory regimes.
One very good point that Rice makes is that the federal government has no jurisdiction and no expertise in securities regulation. Let the feds be the facilitator to get everyone to the table but let the provinces organize and manage the program as a truly national program run cooperatively by those who must live by the rules.
Now is the time for Alberta to play hardball, and accept in principle the concept of a national regulator and formalize the passport system streamlining the administrative and regulatory hurdles but insist that it be run out of Alberta. With modern communications it really doesn’t make much difference where the head office is located.
Alberta needs to get into the game and in fact play a leading role, as we are the growth centre of the nation. A single national body makes sense in principle. It may not give each player everything they want but it should be better than what we have now with only nine out of ten provinces participating. It sounds like the National Securities Administration passport system is a good place to start.
Ken Allred is a former St. Albert Alderman and MLA.
