January 13, 2012
The Short Half Lives of North American Reorgs
Posted by David Zaring

The Canadian Supreme Court just held that creating a single Canadian securities law would be unconstitutional.  Unconstitutional!  Those guys haven't mastered the American Court's approach to legal legitmacy, which I interpret to be "tough in symbolic cases, deferential in substantive ones."  Under the Court's rule, Canada will never be able to federalize its securities law, unless, that is, the court can be overruled under the constitutional scheme, or the constitution is amendable.  Check out this language, summarized by Kevin LaCroix:

The “field of activity” that the Act “would sweep into the federal sphere simply cannot be described as a matter that is truly national in importance.” The basic nature of securities regulation “remains primarily focused on local concerns of protecting investors and ensuring fairness of the markets through regulation of the participants.”  

Sounds both incorrect and an unwise substantive judgment about the securities industry to me.  But it suggests that they take their federalism extremely seriously up there in Canada.  HT: CorpCounsel.

Meanwhile American trade lawyers are worried that the proposed combination of USTR and Commerce will not work well.  I would suggest that they needn't spend a lot of time thinking about it.  Combining agencies means dispossessing a congressional sub/committee of oversight responsibilities, and it isn't as if it can never happen - we have a Department of Homeland Security, after all - but it makes such consolidations much more difficult than mere logic would suggest.  USTR and Commerce do not generate a ton campaign contributions from regulated industry, but they aren't politically meaningless, either.

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