OTTAWA—Talk of a national securities regulator has raised ire in Quebec as the federal government moves forward with a promise to create a single Canadian regulator to replace the current provincial regulators.
The government says a federal regulator is necessary to crack down on white collar crime and eliminate red tape. Canada currently has 13 securities regulators for the 10 provinces and three territories, a bureaucracy the feds claim is costing Canadians billions of dollars annually.
MPs for the Bloc Quebecois and the NDP are vehemently opposed to the legislation, with one BQ member charging that a national securities regulator is an example of “predatory federalism.”
That member, Daniel Paillé, says a federal regulator will be a financial blow to Montreal and will lead to a business exodus to Toronto.
Although Alberta is also said to be opposed to the idea, the strongest opposition has been in Quebec where a group of professional associations and businesses, including Quebec’s bar association, Quebecor, and the cities of Quebec and Montreal have joined voices to denounce the plan.
One of Quebec’s largest finance players, Montreal-based Power Financial—which owns Great-West Lifeco, Investors Group and other financial services companies in Canada—has said it would support a national regulator if all the provinces were on board, which CEO Jeffrey Orr has said is not yet the case.
Prime Minister Stephen Harper and Finance Minister Jim Flaherty have both been quick to point out during question period that joining the regulator will be voluntary and provinces will have the option not to join.
Opposition MPs are alleging that the head office for any such regulator would be in Toronto. Harper says no decision has been made on where it would be headquartered.
“Effective financial regulatory reform is being discussed worldwide. We must follow suit in Canada. Nonetheless, Quebec is entitled to opt out. The other provinces have the right to take part in this, and we will work with them,” the PM said on Tuesday.
Flaherty said a national regulator is essential for Canada to keep on track with the rest of the world.
“Canada is the only major industrialized country in the world without a common or national securities regulator. We cannot afford to wait endlessly.”
Flaherty cites a study that John Coffee, a law school professor at Columbia University, presented to the feds in June which estimated that Canada loses $10 billion a year in economic output and 65,000 jobs because of the different requirements for companies by each provincial securities regulator.
Opposition MPs from the Bloc and NDP challenge those figures.
NDP MP Thomas Mulcair was vehement in his opposition to the idea on Wednesday, shouting during question period that the government should “Mind its own business. Let the provinces regulate.”
The government has sent the matter to the Supreme Court of Canada to get clarification on whether a national regime would contradict the constitutional rights of the provinces.
In the meantime, the government has been funding a new transition office to work with the provinces to prepare a national regime.