If Ottawa’s plans to regulate Bay Street blow up, does Toronto win again?

If Ottawa’s plans to regulate Bay Street blow up, does Toronto win again?

(Image: Andy Burgess) 

One of Stephen Harper’s low-profile priorities is a plan to bring all of Canada’s provincial securities regulators under one national roof, the way most other developed countries did in the previous century.  The provinces tend to be a protective lot, and so Ottawa’s attempts to convince them to get on board don’t seem to be working: B.C. and Quebec loathe the idea, and rumour has it that Brad Wall and Ed Stelmach will be discussing their own western regulator this weekend at the Grey Cup. And now the Globe and Mail is reporting that Dwight Duncan, Ontario’s finance minister and one of the only province-level supporters of Harper’s idea, is worried the wheels are coming off the rails.

“I think the federal government is losing control of this file,” Mr. Duncan said Thursday. “I’m getting very nervous about this. There’s no federal leadership.”…

Jim Flaherty countered that successive federal governments have tried and failed to change the system over the past 40 years. “We as the federal government have moved the issue farther down the field than ever before in the history of Canada,” he told reporters on Thursday.

The fate of the country’s antiquated regulatory system will ultimately be determined by the Supreme Court of Canada, where the federal government will attempt to secure a ruling that it has the authority to create a single agency. Mr. Flaherty said the matter is “quite properly where it ought to be now.”

It’s difficult to imagine the Supremes coming out with anything other than a “yes” to Ottawa’s request, though that’s not even half the battle with the provinces. More important is what happens if this all blows up. The status quo seems to work pretty well for Toronto, with the vast majority of trading happening on Bay Street and the regulation happening just a few blocks away at Queen’s Park.

If nothing else, we’d chuckle at the irony: by blowing up the alternatives, Alberta and Quebec managed to reinforce a system that keeps Toronto at the centre of the financial universe in Canada.

• Ontario fears national securities regulator plan is ‘falling apart’ [Globe and Mail]