OTTAWA - The B.C. government says it will not back Ottawa's proposed legislation to create a national securities regulator, bolstering opposition to a plan that has been referred to the Supreme Court to see if it's constitutionally allowed.
Several provinces contend Ottawa is overstepping its bounds in wanting to form a centralized watchdog to oversee all of Canada's capital markets.
B.C. Finance Minister Colin Hansen said Tuesday that the province still supports the concept of a national securities regulator, but through a co-operative model.
"Our concern is not where we need to get to, it's how we get there," Hansen said.
"Our concern is that with this particular reference that has gone to the Supreme Court of Canada, it has the potential of undermining what would be considered provincial jurisdiction."
Hansen said if the Supreme Court allows the creation of a national regulator as proposed by Ottawa, it could erode the delineation between what is a provincial jurisdiction and what is a federal responsibility.
"We believe that the route to get to a national securities regulator is to acknowledge what portions of this fall under provincial jurisdiction and then for provinces to delegate that constitutional authority to the national securities regulator," he said.
Alberta and Quebec are challenging the constitutionality of the plan in their respective appeal courts while the issue is also being dealt with in the Supreme Court of Canada.
Manitoba, New Brunswick and Saskatchewan have also expressed concerns, while Ontario, home to Canada's largest stock market, has been a leading supporter of the creation of a national regulator.
Manitoba Finance Minister Rosann Wowchuk said the current passport system, which she said is working well, could be tweaked to address concerns raised by supporters of a national regulator.
"We just don't feel a national regulator is necessary," Wowchuk said Tuesday. "I think provinces have been doing a good job since Confederation."
"When you have a provincial regulator you can be more sensitive to the people in your province and Manitoba businesses and investment community have told us that it is important to us to maintain this authority."
Queen's University business professor Louis Gagnon said the passport system as it has been devised is "a pretty neat idea."
"I see B.C.'s position as a negotiating position, whereas I don't see Quebec's position as a negotiating position," he said.
Federal Finance Minister Jim Flaherty, who referred the matter to the Supreme Court for a ruling, said the provinces are concerned about the broader implications related to Ottawa's powers.
"We'll leave it to the Supreme Court," Flaherty said.
Canada is the only country in the G20 without a national securities regulator.
The securities industry in Canada is currently administered independently by the provinces and territories, although jurisdictions co-operate under what is called the "passport" arrangement.
Ottawa has argued the present approach is cumbersome, costly and not effective in detecting and enforcing fraud.
A national securities regulator has the support of many business groups, including the Canadian Bankers Association, and has been recommended by both the International Monetary Fund and the Organization for Economic Co-operation and Development.
