Canada needs to beef up securities regulation enforcement and now is the time to do it, said the chairman of the Ontario Securities Commission (OSC) today.

“We know what the problems are. We know what the solutions are. It’s time to act,” said David Wilson, in a speech to the Economic Club of Toronto this afternoon.

Wilson trumpeted the need for a national securities regulator, among his list of must-do initiatives to improve the state of the country’s securities regulatory system.

“While not the silver bullet, there is no doubt that a common regulator would improve enforcement in Canada,” he said. He cited a recent report from the International Monetary Fund, which suggested that the Canadian financial system would be much better off with a common regulator.

“Moving further to a single regulator would allow policy development to be streamlined, reduce compliance costs, and improve enforcement,” said the IMF, when the report was released in February.

After today’s speech, an audience member asked Wilson how the OSC — the largest regulator in the country — is working with other provinces on the promoting the idea of a single body. Wilson pointed to the proposal produced by a panel led by Toronto lawyer Purdy Crawford in June of 2006. “That blueprint is still on the shelf, available to be reconsidered. [Ontario Finance] Minister Duncan has not been as active as [his predecessor] yet but he might well be,” said Wilson. “The matter is really in the hands of the politicians.”

So, does Wilson really believe the country can unite behind a common regulator? “It’s been talked about for, I think, 40 years,” he later told reporters. “Is it realistic that it will change sometime? I’m an optimist. I think at some point the stars will be aligned.”

In terms of enforcement, Wilson lamented the fact that police in Canada do not have powers to compel testimony from people who may have information relevant to an offence, but who have not been charged. He noted, in fact, that the OSC does have such powers, but that the regulator is also constrained from passing any such information on to police. “I believe it’s time to carefully study the idea of giving police some new but very carefully circumscribed powers to investigate economic crime,” he said in his speech.

When pushed later to elaborate on the types of limits that might be placed on such powers, Wilson told reporters that he is only suggesting that the idea be studied more closely.

“That’s a question for the creative minds in the law,” he said. “The power should be structured in a way to avoid any problems with the Charter of Rights and Freedoms. I’m not suggesting anything that would be in conflict with the Charter.”

In general, Wilson called the current, fractured system of regulation “very Canadian.” He said the enforcement mosaic, which constitutes 13 provincial and territorial securities commissions, three SROs, provincial police forces and the RCMP, is “heavily reliant on collaboration and cooperation.”

“It’s crowded,” he said.

Wilson said the OSC is currently starting work on a project to clarify the differences between regulatory law and criminal law. “We need to more clearly articulate the difference between misconduct that requires a regulatory response and sanctions and misconduct requiring a criminal response and sanctions,” he said, adding that the OSC will be producing its work in this area in the next few months.