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
27 Oct 2016, Seminar, Toronto, Canada

Please join members of the Blakes Commercial Real Estate group as they discuss five key provisions of a commercial real estate purchase agreement that are often the subject of much negotiation but are sometimes misunderstood.

1 Nov 2016, Seminar, Toronto, Canada

What is the emotional culture of your organization?

Every organization and workplace has an emotional culture that can have an impact on everything from employee performance to customer or client satisfaction.

3 Nov 2016, Seminar, Toronto, Canada

Join leading lawyers from the Blakes Pensions, Benefits & Executive Compensation group as they discuss recent updates and legal developments in pension and employee benefits law as well as strategies to identify and minimize common risks.

In association with
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
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.