Ottawa tries to sidestep legal challenges
TORONTO and QUEBEC -- The federal government plans to turn up the heat on its constitutional showdown with Quebec by asking the courts to toss out the province's legal challenge to a proposed national securities regulator.
The government plans to appear before the Quebec Court of Appeal and ask a judge not to hear the province's objections to a national regulator, government and industry sources said yesterday.
The move is part of a two-pronged assault by the Stephen Harper government. It is also asking the Supreme Court of Canada to rule on whether Ottawa has the power to replace Canada's 13 provincial and territorial regulators with a single entity. And it comes just as Alberta launches its own challenge over a national securities watchdog.
"By going to the Supreme Court, the federal government is implicitly asking the Quebec Court of Appeal not to hear our case," a Quebec government official who asked not to be named said yesterday. "We figured this would be their strategy all along."
No date has been set as yet for the Quebec court to hear the province's case, the official added.
The Alberta government announced yesterday that it will go to the Alberta Court of Appeal and will also intervene in the Quebec case, where it will argue that securities regulation is a matter of provincial jurisdiction. Joining forces with Quebec allows the two provinces to send a stronger message of opposition to the federal government's plans, said Alberta Finance Minister Iris Evans.
"We do not want to easily relinquish something that has been our constitutional right," Ms. Evans told reporters in Whitehorse. "That's why we feel it's important to participate with Quebec and also to pursue this as Alberta on behalf of Albertans."
Federal Finance Minister Jim Flaherty is the chief architect of a single regulator, an initiative that has strong support from the Ontario government. Canada's largest province - home to the lion's share of the country's securities markets - has long advocated for a strong national regulator to improve the efficiency of the capital markets and to better co-ordinate enforcement and investor protection.
"We believe that the most appropriate venue to ultimately decide the federal government's jurisdiction in relation to securities regulation is the Supreme Court of Canada," a spokeswoman for Ontario Finance Minister Dwight Duncan said yesterday.
Quebec and Alberta both regard a national regulator as an encroachment on their turf. Alberta government officials are worried that once the federal government controls securities regulation, it will also control the province's capital markets and the ability of Albertans to raise funds in their home market, said a securities industry source close to the government. As a result, the source said, Alberta government officials are concerned they will lose an important lever on the province's economy.
Ms. Evans said Alberta does not want to allow Ottawa to open a door to permit federal control of other areas that historically have been regulated by the provinces.
The move means three courts in Canada are now expected to rule on the legality of the national regulator plan.
Alberta said yesterday it is taking its own action because it could be many months before the federal government launches its Supreme Court challenge, and it wanted to move forward now on its action.
Canadian provinces have no option but to refer questions of constitutionality to their own appeal courts because they cannot refer a case directly to the Supreme Court of Canada, said Toronto securities lawyer Phil Anisman. And Alberta can frame its questions itself in an Alberta challenge, which it cannot do just by relying on intervention in support of the Quebec case, he said.
With files from reporter David Ebner in Whitehorse
