In a unanimous judgment, the Supreme Court of Canada has ruled that the proposed federal Securities Act is unconstitutional. The federal government had referred the proposed legislation to the Supreme Court for an advisory opinion before proceeding with its plans to create a Canadian securities regulator in conjunction with participating provinces.

The federal government argued that the proposed Act falls under the general branch of Parliament’s power to regulate trade and commerce under s. 91(2) of the Constitution Act, 1867. By contrast, several provincial governments argued that the proposed Act falls under the provincial power over property and civil rights under s. 92(13). In rejecting the federal government’s position, the Supreme Court concluded that the main thrust of the proposed legislation does not address a matter of genuine national importance and scope going to trade as a whole in a way that is distinct and different from provincial concerns.

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