Industry Minister James Moore, is currently trying to cajole the provinces into living up to the terms of Confederation, not to mention their own repeated promises, by doing away with the hundreds of internal trade barriers that litter the country. But , progress has been grudging, partial and slow. Photo: Sean Kilpatrick/The Canadian Press There is a maxim, first formulated by the English journalist John Rentoul, that the answer to any question posed in a headline (Is China More Democratic Than the West?) is invariably: no. A list of supporting examples (Will Facebook Kill School Reunions? Could Hitler Come to Power Today? Are Militant Atheists Using Chemtrails to Poison the Angels in Heaven?) became a blog — Questions To Which The Answer Is No — which in turn became a book. There’s even a Twitter hashtag: #QTWTAIN.
Thus, we pass onto a headline that appeared in the Financial Post to start the week: Is National Securities Regulator in Cards?
The online version was a little more grammatical: Will 2015 Finally be the Year of the National Securities Regulator?” But the answer in either case is almost certainly the same: Why, no, actually.
The story did its best to make the matter seem in doubt. Weren’t Ontario and B.C. both founding members of the federal government’s proposed Cooperative Capital Markets Regulatory System — the successor to the ill-fated Canadian Securities Regulatory Authority, which never even got to the proposal stage, the victim of an inclement Supreme Court decision? And didn’t Saskatchewan, New Brunswick and P.E.I. join them last year? And wasn’t there some chance that maybe Nova Scotia and Newfoundland and Labrador might do the same? And …
Annnnnd, stop. Even if the latter two do enlist, which is by no means assured, that still leaves out Manitoba, Alberta and Quebec, which together represent nearly 50 per cent of the country’s capital market activity. Co-operative this may be, a system perhaps, but national it ain’t.
But then, this is surely understandable. After all, there are important principles involved. Why, the whole issue practically reeks of principle. In return for their support, for example, Ontario and B.C. were both assured that they would be the seat of CCMRS regulatory offices. As in fact, were Saskatchewan and New Brunswick: according to the story, the two only “decided to join the Cooperative System after key changes were agreed to by participating parties. These included the creation of two regional deputy chief regulator positions — to be based in those two provinces.”
As for P.E.I., its approval was not obtained until the agreement was modified yet again in the name of “local economic development initiatives.” What kind of initiatives? “Regional representation for all the Atlantic Canadian provinces,” that’s what kind. And how will Nova Scotia and Newfoundland and Labrador be brought on board, if at all? The same way. According to Nova Scotia’s Finance Minister Diana Whalen, “the issue is what kind of influence am I going to have in the (co-operative) model.”
Oh, and — new wrinkle — “what kind of compensation am I going to get from the federal government for giving up the revenues” the province derives from its current regulatory role.
So it is that Canada’s 10 securities regulators have been whittled down to — wait a minute, did I say 10? But of course, there are now 13: I’m forgetting the territories. Surely they would want to be part of this important national initiative? Well, maybe, but it’ll cost ya. “Governments in northern Canada,” the story goes on, “have ongoing issues with the Cooperative System that need to be resolved before any can join up.” In particular, says David Ramsay, the Northwest Territories (pop. 44,000) Minister of Justice, “there’s no provision for a local office in the Northwest Territories in the MOA (memorandum of agreement).”
There you have it. In order to reduce the number of securities regulators from 13 to four — or four times the number of securities regulators that virtually every other advanced economy seems able to get by on — it will be necessary to locate a regulatory office in nearly every participating province or territory.
’Twas ever thus, I suppose. B.C. only entered Confederation after it had been promised a railway. Nova Scotia joined, then threatened to back out, insisting on “better terms.”
Where the Constitution of the United States speaks of forming a “more perfect union,” the British North America Act’s most characteristic provision remains Sect. 119: “New Brunswick shall receive by half-yearly Payments in advance from Canada for the Period of Ten Years from the Union an additional Allowance of Sixty-three thousand Dollars per Annum; but as long as the Public Debt of that Province remains under Seven million Dollars, a Deduction equal to the Interest at Five per Centum per Annum on such Deficiency shall be made from that Allowance of Sixty-three thousand Dollars.”
We are a venal lot.
Still, if the federal Conservatives are looking for an issue to campaign on in the coming election, they needn’t look far. I don’t mean just the securities regulator business. I mean the whole “who speaks for Canada” thing. This isn’t, after all, the only point on which the Harper government has attempted to impose some sort of order on this fractious federation, only to run afoul of provincial provincialism.
The Industry Minister, James Moore, is currently trying to cajole the provinces into living up to the terms of Confederation, not to mention their own repeated promises, by doing away with the hundreds of internal trade barriers that litter the country. The late James Flaherty, as finance minister, attempted not only to harmonize securities regulation, but the hodgepodge of provincial sales tax regimes. And of course there’s the little matter of pipelines.
On all of these fronts, progress has been grudging, partial and slow. The feds have tried persuading the provinces, and they’ve tried bribing them. Maybe what they need is a mandate.
Postmedia News
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