Despite little obvious progress on the issue, the federal government insists on keeping securities regulation on its agenda. Today’s budget includes a pledge to get agreement on a new and improved regulatory system by the end of the year.
The budget reveals that a meeting between senior federal officials and interested provinces is planned for March on how to improve the system, although a date for that meeting has yet to be set. Officials from the Finance department, speaking on background, say that all the provinces will be invited to the meeting, but it remains to be seen how many will show up.
The question of whether the provinces are willing to pursue this issue further remains a big one, as all the provinces (apart from Ontario) have already agreed to adopt a passport system by August; with more harmonized rules to come in 2006.
Ontario remains the odd man out, insisting that a single, national regulator is the right way to go. Just last week it announced it is striking a committee (headed by University of Toronto law professor Ron Daniels) to study the proper structure of a single regulator. That committee’s report is due by the end of June. And, Finance officials say, the federal government is supportive of that effort, and will be interested in its conclusions.
That said, the government remains at pains to avoid demanding a national regulator. In the budget, it notes that the federal wise persons’ committee in late 2003 concluded that a national regulator is necessary, the House standing committee on finance reached the same conclusion in its pre-budget consultations and the International Monetary Fund has also called for a national regulator. Finance maintains that it supports the conclusions of the WPC.
Yet, in their public remarks, government officials have gone only so far as to say that the system needs significant improvement. They have studiously stopped short of citing a national regulator as the solution. In today’s budget, the government continues to toe that line, saying that it aims to reach an agreement on a “new, enhanced system of regulation” by the end of the year. Finance officials say that while it agrees with the WPC, it is open-minded as to design of a single regulator.
That could mean a more harmonized, more-effective passport system than the one to which the provinces have already agreed. But, it’s hard to see why the provinces would want to reopen that agreement with the federal government.
The markets and investors have spoken strongly in favour of a single regulator. The federal government appears to agree, but the big challenge remains getting the provinces onside. The WPC suggested that the federal government could claim jurisdiction over securities regulation. That may ultimately prove to be the only way to get some resolution to this issue.
Budget 2005: Improved securities regulation still on the fed’s agenda
Although the budget stops short of calling for a single securities regulator
- By: James Langton
- February 23, 2005 February 23, 2005
- 16:45