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Draft law introduced in Parliament but no action will be taken until its constitutionality is tested in the Supreme Court.
Ottawa (28 May 2010) - Legislation has finally been introduced in Parliament by the Harper government to give Canada a national securities regulator - of sorts.
Unveiled this week, the draft law would go a long way towards ending the province-by-province, territory-by-territory system of securities regulation that has long made Canada the laughing stock of the financial world.
Even if eventually approved, the bill to create a Canadian Securities Regulatory Authority (CSRA) would have serious limits, starting with the fact that provincial participation would be voluntary and two key provinces, Alberta and Quebec, have already vowed they will not co-operate.
Beyond this fundamental structural flaw, there is the touchy issue of whether the proposed regulator would stand up to a constitutional challenge on whether or not it would infringe on provincial jurisdiction.
To head that possibility off, Finance Minister Jim Flaherty plans to send the new law to the Supreme Court of Canada for a ruling before the proposal is even debated in Parliament. So nothing will happen for some time.
Canada is the only member of the Group of Seven (G7) industrialized nations without a national securities watchdog. As such, it has long had a dismal reputation – at home and abroad – in dealing with corporate crimes and wrongdoing.
For example, Conrad Black is now serving a six-year prison term in Florida because U.S. authorities – not Canadian – called him to account for his crimes. He has yet to be charged, or even seriously investigated, by any securities regulator in Canada.
The issue is important to workers because so many depend on sound financial markets to ensure healthy pension funds.
“Today we have 13 regulators, 13 sets of rules and 13 sets of fees,” Flaherty said this week. "We need to lower barriers, not multiply them.”
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