Proposed Canadian National Securities Law Unconstitutional, Alberta Court Rules
By Nigel Campbell and Doug McLeod, of Blake, Cassels & Graydon LLP, Toronto.
In the battle over the future of securities regulation in Canada, the first round has been decided in favour of the provincial opponents of a national regulator. In a decision filed on March 8, 2011, the Alberta Court of Appeal (the Court) found that the federal government does not have the constitutional authority to regulate securities, and that the currently proposed federal securities legislation would accordingly be unconstitutional. The Court had been asked to opine on the federal government’s authority over securities by way of a reference brought by the Province of Alberta.
Advocates for a national Canadian securities regulator have long argued that Canada’s current status quo — which involves separate securities legislation and regulation for each province — is unnecessarily duplicative, is inefficient, and places Canada at a competitive disadvantage in a global capital marketplace. A number of Wise Persons’ commissions and other reports have studied the issue over the past several decades and have tended to support these arguments.
In response to the longstanding calls for action on a national Canadian securities regulator, on May 26, 2010, the Government of Canada published a proposed draft of a federal Canadian Securities Act (the Act), which it proposed to enact under its constitutional authority over “trade and commerce”…