The Securities Reference: A Comment

• Author: Christopher C Nicholls
• Pages: 291-303

• 291

cha pter 14

he Securities Reference:

A Comment

Christopher C Nicholls

It is old news now: the Supreme Court of Canada has ruled that

the proposed Canadian Securities Act is not within the legislative

authority of Parliament, at least not under the so-called general

branch of the federal trade and commerce power in section 91(2)

of the Constitution Act, 1867.1 Yes, the Court acknowledged, “as-

pects of the securities market are national in scope and affect the

country as a whole.”2 But the reach of the proposed Act was not

1 Reference Re Securities Act, 2011 SCC 66 [Securities R eference]. The notion

that the s 91(2) trade and commerce power comprised two “branches” was

 

Citizens Insurance Co of Canada v Parsons

2 Securities Reference, ibid at para 6 [emphasis added]. As the Court put

it, “Parliament cannot regulate the whole of the securities system simply

because aspects of it have a national dimension”: ibid at para 7. In par-

ticular, the Court seemed to object to the attempt by the federal govern-

ment to regulate the “day-to-day” operations of securities issuers and

sellers. The phrase “day-to-day” appears six times in the judgment. The



legislation, provisions “aimed at management of systemic risk and at na-

tional data collection”: ibid at para 117. “A federal scheme aimed at such

matters,” the Court later suggests, “might well be qualitatively different

from what the provinces, acting alone or in concert, could achieve”: ibid

at para 121. See also ibid -

acterized the federal government’s argument in this way: the securities

markets have evolved. They are now national markets, and so must be

regulated by a national regulator. The Court seemed to accept that some

aspects of securities markets were truly national in nature. But that was

not enough.