Canada: Federal Government Advances Plan For National Securities Regulator

In a significant announcement made in yesterday's federal budget (the Budget), the federal government proposed the creation of a national securities regulator by way of negotiated agreement with the provinces, but also indicated that it would act unilaterally and introduce federal legislation if a negotiated resolution could not be reached in a timely manner. As stated in the Budget:

"The Government's preferred approach to improving the regulation of Canada's capital markets is through a common securities regulator established co-operatively with provinces and territories. If a timely agreement cannot be reached on a common regulator, the Government will propose legislation to carry out its regulatory responsibilities consistent with the decision rendered by the Supreme Court of Canada."

Some of the implications of this announcement are outlined below.

Background: The Constitutionality of Federal Securities Regulation

The federal government's attempts to bring national securities regulation to Canada began well before yesterday's announcement. Most recently, after decades of public debate on the issue, in 2010 the federal government released a proposed federal Securities Act (the Proposed Act), the provisions of which were discussed in a prior Blakes Bulletin, found here. The introduction of the Proposed Act triggered a series of references on the constitutionality of the proposed legislation, including references brought by Alberta and Quebec to their respective Courts of Appeal, and ultimately, a reference brought by the federal government to the Supreme Court of Canada. Blakes Bulletins on those proceedings can be found here, here, and here.

In its decision, released in late 2011, the Supreme Court ultimately held that the Proposed Act was not constitutional. The Supreme Court's decision was based on its finding that the federal government did not have constitutional authority in regard to the bulk of "day-to-day" regulation of securities, and that its authority was limited to areas with a national scope, such as the regulation of systemic risk.

Pursuit of a Negotiated Solution

In its reference decision, the Supreme Court also encouraged the parties to find common ground in regard to their respective areas of authority. In the wake of the decision, there was some optimism among proponents of a national regulator that the Supreme Court's decision could paradoxically serve to help facilitate the creation of a single regulator, by allowing the provinces to negotiate without concern that doing so would fetter their constitutional authority. However, although there have been occasional indications of ongoing discussions amongst the provinces and the federal government since the Supreme Court's reference decision, no agreement has been announced and the current state of discussions is unclear.

The Budget sets out a proposal by which the federal government, and relevant provincial and territorial governments, would delegate administrative authority to a single common securities regulator if a "critical mass of provinces and territories" agreed to do so. As stated in the Budget, the federal government would look for the following four core elements in a negotiated solution to the adoption of a common securities regulator:

  • The regulator should administer a single set of rules
  • It should be operationally independent and self-funded through a single set of fees
  • It should be directed by a professional board of directors with broad capital markets-related expertise
  • The regulator would also preserve the elements of the current system that work well, such as maintaining regulatory offices in each participating jurisdiction, with the capacity and resources to serve market participants locally.

The Budget reiterates the federal government's view that a common regulatory regime would contribute to a stronger national economy, allow Canada to better compete in global capital markets, and permit Canadian businesses to raise capital more quickly and at lower cost.

What Would a Unilaterally Enacted Federal Act Look Like?

This proposal for a co-operatively established securities regulator is presented against the backdrop of the alternative promised in the Budget: the unilateral introduction of federal legislation.

In the event that the federal government unilaterally introduced its own legislation, it is difficult to speculate at this time on what precisely the legislation would look like. In its broad strokes, any legislation would have to comply with the Supreme Court's guidance that the federal jurisdiction to regulate securities is limited to areas of national concern (including, potentially, regulation of systemic risk and capital markets stability), and not the "day-to-day" aspects of securities regulation that are the domain of the provinces.

However, the Supreme Court's guidance is very general and broad, and in practice, regulation of the areas identified by the Supreme Court as likely falling within federal jurisdiction might still, in at least some cases, arguably encompass regulation of some ongoing or "day-to-day" matters that are a central part of provincial jurisdiction. This would be particularly true if the federal government sought to take an expansive approach to the scope of its authority.

What Will Happen Now?

Since the Supreme Court's decision at the end of 2011, discreet discussions have continued between the federal government and many of the provinces. One way or the other, the federal government's announcement may mark the end of the "quiet" phase of any such discussions. The federal government has signalled that if a negotiated agreement cannot be reached in the medium term, it will, if necessary, act alone. Yesterday's announcement suggests that while the ultimate outcome of the debate on securities regulation in Canada remains unclear, there is little chance that the debate will simply quietly fade away.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
23 Nov 2018, Other, Toronto, Canada

Cybersecurity, including data privacy and security obligations, has become a critical chapter in every company’s risk management playbook.

28 Nov 2018, Speaking Engagement, Toronto, Canada

Arbitration has a number of advantages and some disadvantages for the resolution of domestic and international commercial disputes.

Similar Articles
Relevancy Powered by MondaqAI
Osler, Hoskin & Harcourt LLP
Blake, Cassels & Graydon LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Osler, Hoskin & Harcourt LLP
Blake, Cassels & Graydon LLP
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions