Morton vows to fight national regulator

CALGARY – Alberta Finance Minister Ted Morton said the province will stand with Quebec in opposing national securities legislation introduced by Ottawa on Wednesday.

“I want to stress this is not simply about securities regulations. It opens up the whole sector of financial services that fall under provincial regualtions,” he said at a news conference in Calgary.

“If this regulation is approved and passed, it open the door to federal intrusion into this area that will be potentially inviting intrustion into other areas."

He said he wasn’t reassured there would be regional offices under a new national system, and feared talent and investment would shift to Toronto.

Morton made the remarks after his federal counterpart, Jim Flaherty, unveiled legislation that would establish a national regulator to oversee Canada’s financial markets.

In an attempt to fend off the opposition of some provinces, Flaherty immediately referred the legislation to the Supreme Court to rule on whether a national regulator is constitutional.

Flaherty has long campaigned for a single regulator to replace Canada’s patchwork of 13 provincial and territorial securities commissions. Canada is the only major industrialized country without a national regulator.

Morton, however, said the moves infringes on provincial jurisdiction.

“We are not opposed to pointing out what the problems are … and let’s discuss how to do it," he said.

"What we’re not prepared to do is to see Ottawa move unilaterally into these areas. It’s not just about securities regulation, it’s about all the financial services that are regulated . . . under the Canadian constitution,”

Alberta can achieve the same benefits through the passport system, which harmonizes existing systems while allowing customization for regional needs such as junior capital pools, he said.

“If you open the door unilateral federal confisication of an area that’s been under provincial jurisdiction for more than 100 years, then what happens to insurance, pensions, credit unions? Do Albertans want all that regulated from Ottawa? I don’t think so.”

Last year, an expert panel appointed by Flaherty recommended the government establish a national regulator, arguing the current system makes it difficult for Canadian regulators to respond to market developments and guard against the systemic risks that lead to financial crises.

However, Quebec and Alberta remain fiercely opposed. This spring, the Quebec Court of Appeal agreed to hear the Quebec government’s challenge to Flaherty’s plans. Alberta has launched a similar court challenge. Manitoba has so far declined to endorse the plan for a national watchdog.

Quebec Premier Jean Charest said Wednesday his province will continue to fight what he sees as a blatant intrusion in the province’s constitutional jurisdiction.

"This will end up in the Supreme Court of Canada and we will be there to fight for our jurisdiction," Charest told reporters in Quebec City.

The province has also asked the Court of Appeal to hear its case against Flaherty’s plan.

"We can very well have a national system based on the passport system," Charest added, referring to a system worked out between provinces where approvals granted in one province would also be approved in other provincial jurisdictions.

Last June, Flaherty appointed Doug Hyndman, former head of the B.C. Securities Commission, to head a transition team to develop national-securities legislation.

With files from Canwest News Service

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