Regulators (and their respective parent departments, if any) for each province include:[4][5] Canada has no securities regulatory authority at the federal government level.
The Passport system covers prospectus filings, registration of securities firms and individuals, and certain types of discretionary exemptions.
[20] The Panel found that the extant regulatory structure is prone to slow responses, making Canada vulnerable to market risks and impacting its reputation.
The Panel did not believe that the multiple provincial and territorial securities regulators could work effectively as part of a national systemic risk management team, as structural challenges will likely compromise its ability to efficiently address larger capital market issues in a timely manner.
A delayed response, having been poorly managed by any of the securities regulators, may have a negative impact on the integrity of Canada's capital markets as a whole.
Additionally, the Panel reported that the current structure poorly allocates resources, causing securities regulation to be less effective.
This is inefficient as each jurisdiction dedicates a different level of resources to securities regulation, which causes the intensity of policy development, supervision, and enforcement activities to vary across the country.
At the same time, market participants will continue to be burdened with unnecessary compliance costs, even with the full implementation of the passport system.
All Canadian jurisdictions have been invited and encouraged to join in the Government of Canada's effort, which will build on the existing infrastructure and expertise of the provincial and territorial securities regulators.
On 15 October 2009, the federal government announced the appointment of an Advisory Committee of ten Participating Provinces and Territories to the Transition Office with representatives from Newfoundland and Labrador, Prince Edward Island, Nova Scotia, New Brunswick, Ontario, Saskatchewan, British Columbia, Yukon, Northwest Territories, and Nunavut.
[35] On 22 December that year, the Supreme Court returned its decision, finding the proposed Canadian Securities Act to be beyond the constitutional authority of Parliament under the general trade and commerce power.
More specifically, the proposed Act as drafted would not be valid under the general branch of the federal trade and commerce power under section 91(2) of the constitution.
It also noted that it had not been asked for its opinion on the extent of Parliament's legislative authority under other heads of federal power, including the interprovincial and international trade branch of section 91(2).
The court concluded that a cooperative legislative approach through which the federal and provincial governments exercise their powers collaboratively would be possible.
It implemented a pan-Canadian securities regulator as contemplated within the Cooperative Capital Markets Regulatory System to permit the constitution.
[37][38] Jointly engaged in the implementation of this system are the federal Government of Canada and the governments of British Columbia, Ontario, Saskatchewan, New Brunswick, Newfoundland and Labrador, Nova Scotia, Prince Edward Island, and Yukon, under an interim body called the Capital Markets Authority Implementation Organization (CMAIO; French: Organisme de mise en place de l’Autorité des marchés des capitaux, OMAMC).
[38] The CMA'IOs purpose is to assist in transitioning to and implementing a single, operationally-independent"' Capital Markets Regulatory Authority'" ("'CMRA'") contemplated for the Cooperative System.
[31] In 2021, the development of legislation to create the Cooperative System was put on hold as the participating governments needed to rework their plans in response to the COVID-19 pandemic.