Following the release of the Supreme Court of Canada's
decision on December 22, 2011 in the Reference Re Securities Act,
2011 SCC 66, the Government of Canada will be forced to rethink its
efforts to implement a national regime for securities
Although the Supreme Court acknowledged that aspects of
securities regulation raise valid national concerns, it clearly
rejected the federal government's claim to constitutional
authority to displace day-to-day provincial regulation of the
[W]e accept that the economic importance and pervasive character
of the securities market may, in principle, support federal
intervention that is qualitatively different from what the
provinces can do. However, as important as the preservation of
capital markets and the maintenance of Canada's financial
stability are, they do not justify a wholesale takeover of the
regulation of the securities industry which is the ultimate
consequence of the proposed federal legislation. The need to
prevent and respond to systemic risk may support federal
legislation pertaining to the national problem raised by the
phenomenon, but it does not alter the basic nature of securities
regulation which, as shown, remains primarily focused on local
concerns of protecting investors and ensuring the fairness of the
markets through regulation of participants....
The Court noted that "a cooperative approach that permits a
scheme that recognizes the essentially provincial nature of
securities regulation while allowing Parliament to deal with
genuinely national concerns remains available." We expect that
a cooperative approach to securities regulation that results in a
single set of rules and interpretations for all market participants
and avoids the unnecessary costs and delays of the current system
would be welcomed by all. However, as the Court summarized in its
reasons, several proposals for cooperative securities reform since
1935 have proven unsuccessful. Accordingly, while further progress
in rationalizing securities regulation in Canada may be made by the
provincial and territorial securities regulators, we expect that
the impact of this decision will be the maintenance of the status
quo of 13 independent regulators for the Canadian securities
That being said, by effectively removing the potential for
unilateral federal action, this decision will result in a dramatic
change in the conversation regarding how Canadian securities
regulation should evolve.
The passport system, adopted by all of the provinces and
territories other than Ontario, could potentially be expanded.
Additionally, some of the preliminary work undertaken by staff of
the Canadian Securities Administrators who were seconded to the
Canadian Securities Transition Office could be continued as part of
the CSA's ongoing efforts to harmonize the rules under the
existing provincial and territorial securities legislation.
Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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