By John Ibbitson, Globe and Mail, December 23, 2011
In striking down the Conservative government’s proposed national securities regulator, Canada’s highest court has reminded Stephen Harper that, even with a majority government, there must be limits to his ambitions for reshaping the federation.
The Supreme Court decided the government overstepped in its legislation, which invited the provinces to surrender control over regulating securities.
“The ‘dominant tide’ of flexible federalism, however strong its pull may be, cannot sweep designated powers out to sea, nor erode the constitutional balance inherent in the Canadian federal state,” the judges declared in their collectively written, unanimous decision.
The federal government argued that the 13 provincial and territorial commissions that regulate securities in Canada had become increasingly anachronistic in a globalized marketplace, impeding investment and increasing the risk of fraud.
The Constitution’s trade and commerce clause gave Ottawa the authority to regulate what had clearly become a national securities market, federal lawyers told the court. The court disagreed.
“As important as the preservation of capital markets and the maintenance of Canada’s financial stability are, they do not justify a wholesale takeover of the regulation of the securities industry,” the judges ruled...
The constitutional scholar Patrick Monahan believes the ruling opens the door for a more limited regulator responsible only for interprovincial and international capital markets.
“That seems the only realistic option left to the federal government in the wake of this major defeat at the hands of the Supreme Court,” the provost of York University wrote in an article for The Globe and Mail.
The judges did note that “a co-operative approach” between Ottawa and the provinces to create a national regulator might meet the constitutional test...
Until Thursday, the Conservatives had been using their majority government to pursue their agenda with little regard to critics or even courts – dismantling, for example, the monopoly powers of the Wheat Board despite a judicial ruling that it must first hold a plebiscite among affected farmers.
Thursday’s Supreme Court decision doesn’t mean the Conservatives cannot continue their efforts to retreat from social policy while advancing the economic union. But as the judges concluded: “Co-operation is the animating force. The federalism principle upon which Canada’s constitutional framework rests demands nothing less.”
Co-operation is the animating force. The federalism principle upon which Canada's constitutional framework rests demands nothing less.
Square this text with your recent "dump the Wheat Board without the required plebescite," Mr. Harper.
Square this text, too, with your Finance Minister's fiat that the provinces will have 6% annual increase in funding for health care for three years, and then 4% based roughly on provincial GDP for the balance of the decade.
Square this text, too, with your withdrawal from social policy, one of the animating themes of Canadian historical legistlation, leaving the field exclusively to the provinces, in what amounts to an abdication of the role of the federal government in social policy, when we all know that the funds, and the national attributes for each program have emanated from Ottawa, with the provinces accepting modest national characteristics.
Co-operation, the animating force, demands that both levels of government work together, sitting at the same table at the same time, with the same agenda, and even setting that agenda can be a complicated issue. But it is the complications and the nuances and the shades of meaning that are ascribed to the words and the ideas and the applications of all ideas that surely make up the Canadian fabric and the Canadian culture.
However, it must be Mr. Harper's impatience with these minuscule details that forces him to withdraw, petty as those differences seem. After all, only economics, and fiscal and monetary policy, matters in the world of Stephen Harper, certainly nothing as important as whether people have adequate shelter, food, water and health care.
Devolving both fiscal responisbility and policy formation to the provinces, may be a great way to avoid political controversy about issues that matter to Canadians, and thereby remain "teflon clean" when it comes time for a federal election. However, it removes the voice of PEI voters, for example, from the national social policy agenda, something that every Canadian does not wish to happen.
"States rights" has long been a theme in the U.S. especially when contentious issues like abortion are faced. "That matter must be left to the states" is a cry of the right for the obvious reason that it is far more likely they can and will have their way in a state legislature, without the national spotlight glaring into the debate and exposing the implications of no national approach.
Harper's attempt to separate the provinces and federal government, in areas of his choice, especially the economy and trade, negates the historic and legal framework of the country, leaving him with the most favourable conditions for a permanent Conservative government for the next several decades.
Thanks, sincerely, to the Supreme Court, for their decision, limiting the audacious will of the Prime Minister.