The proposed federal regulation of Canadian capital markets is of dubious constitutional authority and is a centralist solution in search of a problem. Contrary to the claims of the chief proponents, who enjoy federal funding, it would make markets less harmonious and more regulated. It would undermine the bottom-up coordination already underway between the provinces and territories without federal imposition. Further, the new federal role of surveyor and stabilizer generates privacy and moral-hazard concerns. Federalization lacks clear justification, both in terms of economic theory and competitive pressures. The most compelling explanation for its advancement is a desire for regulatory capture and social engineering from Ontario at the expense of sovereignty and constituent-driven policies in the provinces.

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