“Is the Proposed Canadian Securities Act Within the Legislative Authority of the Parliament of Canada?”

Today’s a day that Phil Anisman must have wondered whether he would see. Back in 1979, he published Proposals for a securities market law for Canada.

A national Securities Bill unveiled, a Canadian Securities Regulatory Authority established and the scheme instantly referred to the Supreme Court of Canada.

As the preamble says:

  1. capital markets affect the well-being and prosperity of all Canadians;
  2. capital markets are increasingly national and international in scope;
  3. capital markets are rapidly evolving and include increasingly complex financial products and methods of distribution and trading;
  4. it is important for Canada to have competitive capital markets and a strengthened, comprehensive and coordinated enforcement regime for those markets;
  5. it is in the national interest to effectively protect and promote Canadian interests internationally, including through the development of consistent regulatory policies for capital markets;
  6. the integrity and stability of Canada’s financial system would be enhanced by the presence of a single Canadian securities regulator as part of the Canadian financial regulatory framework;
  7. Parliament intends to create a single Canadian securities regulator, supported by a comprehensive statutory and regulatory regime that applies across Canada; and
  8. Parliament chooses to do so through a process under which the regime will apply as willing provinces and territories opt in.

This will be a major decision on the scope of the federal trade and commerce power, and its intersection with the criminal law power, the first significant probing since City National Leasing twenty one years ago. It will require revisiting some of the themes of Global Securities Corp. v. British Columbia (Securities Commission), 2000 SCC 21, [2000] 1 S.C.R. 494

Here is the Bill, a backgrounder on the reference, a press release, and more background on how the scheme would work, with provincial opt-ins.

The move has been denounced in Québec City by Raymond Bachand, the Québec Finance Minister.


  1. Fritz Lunquist

    How persuasive is the federal argument that Canada needs a unified securities regulation scheme so badly that the government must override a lot of long-accepted jurisdictional allocations, when the proposed legislation allows provinces to opt out of the unified system?

    And presumably the federal regulator will not be part of the passport system, so it will be harder under the new regime (assuming it is upheld by the SCC) to clear a security for public sale than it is today under the allegedly fragmented (but in practice pretty harmonized) system.

    This does not sound like obvious progress to me.

    There are, or should be, pretty substantial administrative law principles about the lack of Parliamentary guidelines for the regulator’s exercise of discretion. Where is the rule of law in the new legislation?

  2. any chance the SCC would consider the legislation intra vires under the POGG branch?

  3. POGG is unlikely to be the way to go because of the reservations expressed by the court in Ontario Hydro v. Ontario (Labour Relations Board), [1993] 3 S.C.R. 327.

    So the most likely branch would be the trade and commerce power using the line of argument spelled out by Dickson CJC in General Motors of Canada ltd. v. City National Leasing, [1989] 1 S.C.R. 641

  4. Back in pre-history (2003 or thereabouts), the federal “Wise Persons’ Committee” commissioned not one, but three separate opinions from Bay Street firms on the constitutionality of a proposed federal Canadian Securities Act. All three opinions concluded that such an act, along the lines of the model proposed by the Committee, would pass constitutional muster under the trade and commerce power.

    See the report and opinions here.