Federal officials are abandoning plans to spend up to $100,000 on a logo and other branding for a new national securities regulator after the proposed contract met with vocal opposition from some provinces.
The federally created Canadian Securities Transition Office issued a brief statement late Tuesday confirming the change.
Alberta and Manitoba had said the spending was premature given that Ottawa hasn’t received approval from the Supreme Court to proceed with a national regulator. Alberta’s finance minister, Ted Morton, warned this week that such spending could be "a colossal waste of taxpayers’ money" if his province defeats the federal plan in court.
Earlier Tuesday, the vice-chair of the transition office, Bryan Davies, delivered a public speech that played down the provincial criticism.
Speaking in Vancouver, Mr. Davies said the plan Finance Minister Jim Flaherty outlined last year is "definitely alive and in good health."
In a speech to the UBC National Centre for Business Law, Mr. Davies shot back at provincial critics who predict more provinces will join the four that already oppose a national securities regulator.
"It’s not that we’re running into more opposition," he said in the speech. "Rather, as Minister Flaherty recently commented, it’s the same opposition -- just noisier."
The evidence, however, suggests otherwise. Alberta and Quebec have always been vocal critics of the plan, followed by Manitoba. Last month, Saskatchewan publicly joined the ranks of provinces opposed to a national regulator.
Monday was the deadline for provinces to file statements in support of Ottawa in a case before the Supreme Court, which has been asked to rule on the constitutionality of the federal proposal. Only Ontario submitted documents in support of the plan, while B.C. asked for more time and is not tipping its hand.
The court’s deadline for submissions from provinces opposed to a national securities regulator is Feb. 11.
Ottawa’s plan has the support of the Canadian banking industry.
In a factum filed this week, the Canadian Bankers Association tells the Supreme Court that the system of provincial regulation leaves Canadians vulnerable to fraud.
"Currently, fraudsters banned in one province simply move province and continue operating," the association stated, citing a 2003 research report. The association noted that over the past decade, three high-level independent panels -- including one as recently as 2009 -- studied the idea of a national regulator, and all three concluded that one is urgently needed.
The federal finance minister unveiled legislation in May 2010, to create a national securities regulator, and immediately asked the Supreme Court to rule on whether such an initiative is constitutional. Provinces opposing the idea say securities regulation is a purely provincial power and that that national efforts can take place through co-operation between the regulators under a "passport" system. However, Ontario does not participate in that arrangement.
Françoise Bertrand, president of Quebec’s federation of chambers of commerce, said Mr. Davies’ speech indicates Ottawa is moving ahead regardless of provincial concerns.
She added that Canada’s relatively strong performance during the global recession shows the strength of the existing system.
"The first rule for businesses is predictability, and what [Mr. Davies’] speech and the Flaherty team is pushing is an environment that will create uncertainty," she said. "There’s definitely no need."
In his Tuesday speech, Mr. Davies echoes the banking industry’s concerns regarding the status quo.
"We have to adapt or die," said Mr. Davies, who is also chair of the Canada Deposit Insurance Corporation and a former senior vice-president of Royal Bank Financial Group. "That lack of cohesion in our current system is a handicap we can no longer afford."
