OTTAWA â€" Thwarted by a court ruling blocking it from unilaterally establishing a national securities regulator, the government of Canada joined with two provinces to form a “cooperative†agency on Thursday.
Initially the as yet to be named regulator will cover only the provinces of British Columbia and Ontario, the latter being the center of Canada’s capital markets.
Canada is unusual in not having a national securities overseer. The current Conservative government, the Ontario government and many members of the financial community say that the current system, which spreads control among 10 provinces, makes it more difficult to raise capital, increases costs and increases the possibility of fraud.
But in 2011 the Supreme Court of Canada struck down an attempt to set up a national regulator through federal legislation ruling that controlling the industry is a provincial responsibility.
Under the new plan, provinces will be invited to join the new agency, which will be have its headquarters in Toronto. The federal government has also promised to give provinces money, on a transitional basis, to make up for the fees their regulators now collect.
Quebec, along with Alberta, has been the most resistant to yielding authority to a national body.
Alexandre Cloutier the province’s intergovernmental affairs minister, suggested on Thursday that Quebec might challenge the cooperative agency’s legitimacy in court.
