Reference re Pan‑Canadian Securities Regulation 2018 SCC 48

Reference re Pan‑Canadian Securities Regulation 2018 SCC 48

Date2018-11-09
Neutral citation2018 SCC 48
Report[2018] 3 SCR 189
Case number37613
JudgesWagner, Richard; Abella, Rosalie Silberman; Moldaver, Michael J.; Karakatsanis, Andromache; Gascon, Clément; Côté, Suzanne; Brown, Russell; Rowe, Malcolm; Martin, Sheilah
On appeal fromQuebec

Breakdown of the Decision:

  • Unanimous Decision: The Court (Chief Justice Wagner and Justices Abella, Moldaver, Karakatsanis, Gascon, Côté, Brown, Rowe, and Martin in agreement)

Case Background:

  • Issue: The constitutionality of a proposed Pan-Canadian securities regulation system. Canada lacks a national securities regulator, resulting in each province and territory having its own regulatory framework. The federal government, believing a single regulator is crucial for the economy, sought a cooperative approach.
  • Previous Decision: In 2011, the Supreme Court ruled that Parliament alone could not create a national regulator without overstepping provincial powers. A cooperative approach between federal, provincial, and territorial governments was suggested as a constitutional alternative.

Proposed Cooperative System:

  • The proposal included a “draft law” for federal Parliament, a “model law” for provincial and territorial legislatures, and the creation of a national securities regulator.
  • An agreement between executive branches (Prime Minister, Premiers, and their cabinets) set out the system.

Concerns and Reference to Court:

  • Quebec, Alberta, and Manitoba raised concerns about the proposal.
  • In 2015, Quebec asked its Court of Appeal two questions:
    1. Is the proposed Cooperative System constitutional?
    2. Does the draft federal law overstep federal trade and commerce powers?
  • The Quebec Court of Appeal answered no to both questions.

Supreme Court’s Findings:

  1. Constitutionality of the Cooperative System:
    • The Cooperative System does not violate parliamentary sovereignty. Provincial and territorial legislatures are free to accept or reject the model law and any subsequent changes.
    • The “Council of Ministers” involved in the system does not have legislative power; it only approves changes, maintaining legislative sovereignty.
  2. Draft Federal Law and Federal Powers:
    • The draft federal law fits within Parliament’s general trade and commerce powers. It addresses systemic risks to Canada’s economy, a truly national issue.
    • The law is carefully designed to complement provincial and territorial laws without infringing on their roles in securities regulation.
  3. Delegation of Power:
    • The federal government can delegate regulation-making powers to other entities, including provincial groups. This delegation does not undermine federal authority as Parliament retains the ability to revoke these powers.

Conclusion:

  • The Supreme Court affirmed that the proposed Cooperative System is constitutional. However, participation in the system is a policy decision for each province and territory.
  • The ruling supports a unified approach to securities regulation in Canada while respecting the constitutional division of powers between federal and provincial governments.

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