Canadian Feds Loose Fight for Regulatory Bid

Finance Minister Jim Flaherty delivered his most elaborate public reaction since last month's critical ruling by the Supreme Court of Canada.

That decision may have quashed the decade-old project, touted by successive governments, to create a one-stop shop for the country's securities regulation.

But Flaherty pointed out that there's still room for a federal role.

"It's clear in the Supreme Court of Canada judgment that the day-to-day regulation of securities will remain with the provinces," Flaherty said in an interview.

"But (the court) also said that there is an area of federal jurisdiction, including national standards and systemic risk. So I hope — and we'll see — I hope that we can make an arrangement with the provinces to proceed with a Canadian securities regulator."

Ottawa can have a regulatory role

He made the remarks in an interview in Switzerland, at the Davos economic summit.

Flaherty said that last month, when the Supreme Court ruled that securities regulation was a provincial responsibility, it also agreed that the feds could participate in the oversight of general and systemic risks.

"It's very difficult to deal with any significant financial issue in Canada without the involvement of the Government of Canada," he said, "because so much of the financial world applies to many provinces and territories, not just one."

To play that role, Flaherty said the federal government would need to create a new organization.

He said the task could not simply be handed to the existing Office of the Superintendent of Financial Institutions. That agency, he said, oversees banks and insurance companies and the additional role could create a conflict of interest.

-CBC News