Common sense dictates that Canada should have a single securities regulator. But as much sense as the idea makes in principle, its advocates only undermine their cause when they reflexively tout it as a solution to every conceivable industry problem.

There are many good reasons for a single regulator. But, lately, it seems that almost any regulatory issue is likely to have the single regulator peddled as the answer, whether it’s relevant or not.

Federal Finance Minister Jim Flaherty has used the asset-backed commercial paper crisis as an excuse to repeat his call for a single regulator. And, in a recent background briefing with reporters ahead of the G7 meeting of finance ministers and central bank governors, a senior official reiterated the need for a single regulator when asked if Canada needs to toughen financial- sector regulation as part of the global response to the crisis.

There are plenty of good reasons for a single regulator, but the credit crunch isn’t one of them. It’s not clear that any regulator could have prevented a market disruption that had its roots in the U.S. subprime mortgage industry and that has been amplified by the fact that credit risk had become dramatically undervalued and underestimated.

Although the crisis has certainly exposed a good number of regulatory gaps that need to be closed, Canada’s fragmented system is not one of those gaps. To claim that it should be the primary policy response suggests hewing to a political line rather than a genuine commitment to deal with the problem.

Similarly, Ontario Securities Commission chairman David Wilson recently gave a speech that was largely devoted to improving enforcement performance. A single regulator was touted as one of the solutions, among a handful of ideas that would directly affect enforcement, such as: new investigative tools; better information sharing; streamlined case assessment; special prosecutors; and greater efforts to get clients their money back. Once again, the single regulator is being trotted out as an answer to a problem that has many facets to it, least of all the fragmented Canadian system.

Inserting the single regulator into every policy debate smacks of desperation. It’s as if by throwing the idea out there often enough, eventually it will stick. More likely, it will just ensure that the only way it will happen is through a nasty political showdown.