Taking Stock: Securities Markets and the Division of Powers

Recent developments in Canada\u27s securities markets highlight their national character and call for a fresh consideration of the question of federal securities regulation. Developments in the constitutional case law have changed the legal context, such that the trade and commerce and the peace, order and good government powers under the Constitution Act, 1867 would likely support federal securities legislation. The securities question, important in its own right, also serves as a case study for how the Supreme Court of Canada conducts division of powers analysis for matters that have undergone substantive change. The authors contend that competence over a provincial matter should be reassigned to Parliament only when that matter has changed so substantially that untenable legal fictions are required to keep it \u27Within the province, no benefits associated with the values of federalism arise from continuing provincial jurisdiction, and uniform interprovincial cooperation is required for effective regulation. The existing level of interprovincial cooperation regarding securities shows the need for national regulation and raises concerns about influence based on market and not democratic power: by virtue of its market dominance, Ontario exerts a significant extra-territorial influence over other provinces\u27 securities regulators. While a reorganization of Canada\u27s securities regulation would clearly require negotiation between the two levels of government, the increasing strength of the legal case for federal regulation, in terms of changes in the securities markets and in the constitutional case law, would influence such negotiations