Capital Markets


John Tuzyk, Cynthia Sargeant and Faye Ghadiani

On September 19, 2013, the federal Canadian government and the provincial governments of British Columbia and Ontario announced an Agreement in Principle to establish a "cooperative capital markets regulatory system" (the Cooperative System) and invited other provinces and territories to participate. This announcement follows the federal government's proposal for the creation of a national securities regulator by way of negotiated agreement with the provinces and territories in the March 2013 Federal Budget (see our previous Blakes Bulletin found here).

The Agreement reflects the 2011 decision of the Supreme Court of Canada that the federal government's previously proposed legislation establishing a national securities regulator was unconstitutional, as falling outside federal jurisdiction (see our previous Blakes Bulletin found here). The Agreement provides that each jurisdiction is acting within its constitutional jurisdiction and is not surrendering its own jurisdiction over the matters in the Agreement.

The Agreement contemplates one single regulator would administer provincial and federal legislation under authority delegated by each participating jurisdiction.

Among the stated purposes of the Cooperative System are the facilitation of capital raising through more integrated markets on the basis of national standards reflected in cooperatively developed regulations consistently applied, the strengthening of Canada's capacity to manage systemic risk and enabling Canada to play a more influential role in international capital market regulatory initiatives.

As set out in the Agreement, some of the key features of the proposed Cooperative System are:

  • A combination of both provincial and federal legislation
    • Uniform provincial legislation regarding regulation of securities markets would be adopted by each participating jurisdiction
    • Federal legislation would address criminal matters and matters related to systemic risk
  • The common regulator would have an executive head office in Toronto
  • The regulator would be administered by an expert board of directors overseen by a council of Ministers, with each participating jurisdiction represented
  • The council of Ministers would have authority for approving regulations
  • Local offices in all participating jurisdictions would be maintained
  • Self-funded through a single, simplified fee structure


The Agreement seeks to reassure provinces and territories that the capacity to weigh and consider local perspectives would be maintained. It appears that this reassurance was not enough for Quebec as its Finance Minister publicly rejected the invitation to join the Cooperative System on the day it was announced and the Quebec Intergovernmental Affairs Minister has signalled that the province may oppose the initiative in court. 


With the enactment of legislation by each participating jurisdiction proposed to be completed by the end of 2014, the "cooperative capital markets regulator" is expected to be operational in the participating jurisdictions by July 1, 2015. With the apparent opposition of at least some of the provinces which have  significant capital markets, it is not clear whether the proposed Cooperative System will assist, or in fact detract from, national harmonization of Canadian securities regulation.

For further information, please contact:

John Tuzyk 416-863-2918
Faye Ghadiani 416-863-3330

or any other member of our Capital Markets group.

Posted by:

John Tuzyk, Cynthia Sargeant and Faye Ghadiani

Tags: Capital Markets

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