“Encouraging Canadians to invest,” says Timothy Price, outgoing chairman of the Investment Industry Association of Canada, is, ultimately, everything the IIAC can do to “sustain strong markets.”

Three elements, however, require attention to “make sure the future is even more robust,” Price, who is also president and CEO of MacDougall, MacDougall & MacTier in Montreal, told the IIAC’s annual meeting in Banff yesterday.

First, the Canadian tax system needs to be realigned in concert with promoting investment and economic growth. “Canada’s productivity depends — more than anything else — on how well Canadian companies are able to raise capital,” he says.

Specifically, Canada’s policies in regards to capital gains needs to be revisited and capital gains taxes need to be reduced, says Price: “to put Canada on a competitive footing with all other advanced economies.”

Secondly, new technology is revolutionizing the way markets function, but its evolution has been uneven. Price called on regulators to facilitate the integration of new technologies. “We applaud any initiative that broadens investor choice,” he says. However, the rapid development of six new trading platforms, with two more on the way, means that unless regulators take the initiative, dealers will find themselves with a maze of systems with competing objectives. The IIAC is calling on the Canadian Securities Administrators to set minimum conditions.

“The responsibility must be assigned where it belongs” says Price, “to the market place.”

Finally, the investor bears the cost Canada’s fragmented regulatory system. “The duplication and lack of coordination we see under our current splintered regime hurts investors,” says Price. The implementation of the passport system and the recent merger of the Investment Dealers Association of Canada and Market Regulations Services Inc. are steps in the right direction but there is a great deal more consensus required to reduce costs and inefficiencies.

Regardless of the specific regulatory model, Canada needs uniform principles-based standards which allows regulators to respond to change more nimbly. It sounds good, says Price, but getting there is a different story: “It is easy to get discouraged. But one thing is clear: we need to move the ball forward.”