The federal government is adding its voice to the increasing clamour for a single securities regulator.

In Tuesday’s federal budget, the government says it supports the conclusions reached by the federally constituted Wise Persons’ Committee that delivered its final report in December. Budget documents note the federal government agrees with the WPC’s finding that the ideal regulatory structure for Canada is “a single securities regulator, structured to be responsive to regional capital market needs and the special requirements of small- and medium-sized enterprises, with an inclusive governing structure.”

Ottawa pledges to work with provincial and territorial governments to move the idea forward. Speaking not for attribution, Finance officials indicate that the government plans to initiate ministerial-level discussions in the hope of bringing some resolution to the issue.

As to whether jurisdictions, such as Quebec, that have openly rebuffed calls for a single regulator could be brought into any agreement, one Finance official said this would be part of the discussions, but it’s impossible to predict the outcome.

The official noted that Ottawa feels compelled to act on the WPC recommendations because there appears to be a great deal of support for it from the capital markets, and there’s a “sense of urgency” surrounding the issue of healthy capital markets. “It is now incumbent on governments to act quickly or run the risk that our capital markets will be left behind,” the budget plan warns.

Harold Mackay, a Saskatchewan lawyer and vice chairman of the WPC, says that he’s pleased with the level of interest the federal government has shown in the issue, and is hopeful that the question of regulatory structure can be resolved once for all in the best interests of Canadians and the capital markets.
The budget also included a couple of other regulatory tidbits. First, it
proposes to review the apparent overlap between the Office of the Superintendent of Financial Institutions and the Canada Deposit Insurance Corp.

Finance officials note that there are still roles for both organizations — CDIC to insure bank deposits and OSFI to ensure the safety of federal financial institutions — but in carrying out their respective mandates, both are taking on prudential functions. In the budget, the government pledges to examine how to best address any overlap in prudential, administrative and corporate services functions between the two groups. And it hopes to introduce any changes before the end of this year.

Another area up for reform is corporate governance. In the budget, the government says it is preparing amendments to the Canada Business Corporations Act aimed at enhancing the transparency and accountability of corporations to investors and shareholders. The proposals will touch on the role and composition of boards, auditor oversight and independence, financial reporting and enforcement. It says it hopes to release these proposals in the near future. Securities regulators have also recently dealt with these same issues, but the CBCA focuses on the application of these rules in corporate law.

Also, the government pledges to work with industry and regulators to ensure that the Canadian Public Accountability Board, the new independent public oversight body for accountants, “is able to achieve its mandate, within a sound governance structure and a strong legal framework.”