MONTREAL – Quebec is going to court in its bid to thwart Ottawa’s plan to create a national securities regulator.
Finance Minister Raymond Bachand said Wednesday that Quebec wants its appeals court to look at whether the federal plan is constitutional.
Quebec is not suing Ottawa but wants its top court to state that securities are a provincial jurisdiction and that any federal intrusion violates the Constitution.
Quebec is hoping a finding in its favour will have a dissuasive effect on Ottawa.
Federal Public Works Minister Christian Paradis said in Montreal that participation in any national securities regulator will be voluntary.
“The federal government has jurisdiction in this,” said Paradis, adding Ottawa has already obtained legal opinions on the matter.
“Yes, there are provincial powers and this is why we have taken the approach of collaboration, of openness. It’s a voluntary approach.
“We are not imposing anything on anyone.”
However, Bachand and Intergovernmental Affairs Minister Claude Bechard said Ottawa had forced Quebec’s hand by opting for “confrontation.”
Bechard said the province will use any means necessary to torpedo the proposal and said dropping it could help the Conservatives in Quebec.
“A few months before an election, that sort of gesture could serve to increase the credibility of the Conservatives,” he said.
It’s not the first time Quebec has tried this type of legal tactic. In 2004, it went to the appeals court to challenge federal incursion into the realm of parental leave.
The court ruled in Quebec’s favour but the Supreme Court of Canada eventually ruled the federal efforts to be constitutional. The matter was finally settled when a political solution was reached and Ottawa agreed to transfer responsibilities to Quebec.
Federal Finance Minister Jim Flaherty created an advisory office last month to help draft legislation to create the national regulator.
Besides Quebec, Alberta and Manitoba support the current system which allows each province and territory to set regulations for securities trading and investment.
Quebec says the financial crisis has demonstrated that the regulation of securities is most effective when it is not centralized.
Supporters of a national regulatory system, which most countries use, say it would cut the regulatory costs on companies seeking to list on Canadian stock markets. Currently, they must file reports and other information with 10 provincial securities commissions.
Critics say a national regulator, such as the U.S. Securities and Exchange Commission, did not prevent the spate of white-collar crimes and banking industry collapse that battered the U.S. financial sector.