Reference re Securities Act

The federal proposal for a comprehensive national securities regulator was held ultra vires. The Act crossed the line into provincial jurisdiction over property and civil rights — securities regulation is, in pith and substance, day-to-day regulation of commercial transactions, not an aspect of national-dimension trade.

The federal government referred the constitutionality of its proposed Securities Act, which would have established a national regulator administering a single comprehensive regime.

Is the proposed Act intra vires Parliament under s.91(2) (general trade and commerce)?

No — ultra vires.

The general trade and commerce power has been read narrowly since Citizens' Insurance v Parsons. The General Motors test remains: the Act must concern trade as a whole rather than a particular industry; involve general regulatory scheme; involve oversight by a regulatory agency; concern matters where provinces would be jointly or individually constitutionally incapable; and a failure of one or more provinces would jeopardise the whole. The proposed Act failed several of these — it descended into specific commercial transactions and replicated provincial regulation.

The Court accepted that systemic risk and national data collection might support some federal role. But the Act in its breadth was substantively duplicating provincial securities regulation, intruding into property and civil rights. A cooperative federalism approach was suggested.

Modern statement of the limits of federal trade and commerce. Catalysed the Cooperative Capital Markets Regulatory System framework — a 2018 reference upheld a more cooperative federal-provincial structure (PCM Reference).

Reference re Securities Act, 2011 SCC 66, [2011] 3 SCR 837.

McLachlin CJ, Binnie J, LeBel J, Deschamps J, Fish J, Abella J, Charron J, Rothstein J, Cromwell J