In a decision just now handed down, the Alberta Court of Appeal has ruled against the federal government in Reference re Securities Act (Canada), 2011 ABCA 77. The main question put to the court by the government of Alberta was as follows:
1. Does the Parliament of Canada have the legislative authority under the Constitution Act, 1867:
(a) to pass sections 295, 296 and 297 of the Budget Implementation Act, 2009 S.C. 2009, c.2,
(b) to pass legislation that is co-extensive in substance with the Alberta Securities Act and similar to the draft Securities Act appended to the Final Report and Recommendations of the Expert Panel on Securities Regulation, and
(c) to pass legislation that is the same as or similar to the Proposed Canadian Securities Act – Sessional Paper No. 8525-403-10?
The court’s conclusion is set out below:
 In conclusion, the proposed federal securities legislation represents the intrusion of the federal government into an area long occupied by the provincial governments. Regulation of the professions, regulation of specific industries, regulation of particular types of contracts, and regulation of forms of property have always been considered to fall under provincial powers. The Government of Canada obviously feels that national regulation of the securities industry would be in the national interest. A number of the provinces object, on the basis that regional autonomy, diversity, and priorities will be sacrificed. One of the fundamental principles of the Canadian federation was to preserve local powers and local diversity, to enable the promotion of local interests: Consolidated Fastfrate Inc. at paras. 29-30. As the Supreme Court has noted, fostering co-operation among governments and legislatures for the common good is a key feature of successful federalism. The division of power represents an understanding reached on the nature of Canadian federalism that should not lightly be disrupted by any one level of government or the courts. If the Government of Canada wants a paradigm shift in the power to regulate the securities industry, the way to accomplish that is through negotiation with the provinces, not by asking the courts to reallocate the powers under the Constitution Act through a radical expansion of the trade and commerce power: Canadian Western Bank at para. 24; Reference re Employment Insurance Act at para. 10.
 Question 1(c) posed in the Reference should be answered in the negative. While the criminal law prohibitions likely would survive on a stand-alone basis, the proposed national securities act only seeks to implement them as part of the overall unconstitutional regulatory regime. In light of that answer, questions 1(a) and (b) need not be answered. . . .
I have little or no expertise in this area, so I’ll leave it to others to analyse the judgment, whether by posts or comments to this post.
[hat tip: an alert Ted Tjaden]