Although canada’s new Conservative government looks unlikely to advance the concept of a single national securities regulator, the Ontario government continues to push for that agenda.

In the latest move, Gerry Phillips, the Ontario minister in charge of securities regulation, strongly hinted that Ontario would yield to others on the location of the headquarters of the national body.

In a speech to the Canadian Club of Toronto early last December, Phillips said: “We are flexible on specifics regarding all matters that could contribute to a model for a common securities regulator that best serves the needs of investors and businesses.

“Wherever the head office is located, the new common regulator will need to be staffed to provide excellent regulatory service to all Canadian market participants, regardless of their size, industry sector or geographical location.”

The location of the headquarters has been referred to as a “hot potato.” Provincial leaders tend to make great political hay when national headquarters are located in their provinces and, conversely, losing out to Ontario is never popular in the West or in Quebec.

Nevertheless, Alberta Finance was unmoved by Ontario’s gesture. A spokesperson says the Ontario government’s apparent flexibility about the location of headquarters for a national regulator is “neither here nor there” because Alberta is working with other jurisdictions on the passport model.

“We’re making progress with the passport model, and that’s what we’re focusing on right now,” says Gerald Kastendieck. “That’s what the provinces and territories have agreed to.”

The passport model of securities regulation marks some progress toward the harmonization of Canadian securities regulation, whereby regulatory and legal rulings in one jurisdiction are abided by in the rest of the country. But it falls short of a single-regulator model.

And even though this is a subject with a long history, the dialogue about the potential and usefulness of a national securities regulator has seldom been louder in Canada. The former federal Liberal government and the provincial Liberal government in Ontario were pushing that agenda in concert.

Wayne Alford, a former regulator at the Alberta Securities Commission who teaches securities law at the University of Calgary, says Ontario’s olive branch doesn’t appear attractive to Alberta, Quebec or any other province because the brunt of the regulatory power and expertise will still reside in Toronto, where most of the capital markets reside, anyway. “It’s transparent politicking,” he says.

Alford, who is in favour of a single regulator, says it appears that the model’s best hope lies with Ontario’s Crawford panel, which also recommends a single regulator. In addition, he says, the provinces should spearhead the issue; a Tory government that is de-centralist, he says, would probably back off on securities regulation, which is considered a provincial power.

Last spring, Phillips asked Purdy Crawford, a veteran corporate lawyer at Osler Hoskin and Harcourt LLP in Toronto, to chair a national panel that would develop a model for a single securities regulator. It published Blueprint for a New Model late last year, calling the headquarters question a “hot potato.”

The merits of a national regulator have never been in dispute but, historically, blunt provincial thinking wins out. It is generally agreed that a company issuing securities in Canada faces a global competitive disadvantage. It pointlessly incurs regulatory and legal costs in 13 jurisdictions. Per dollar raised, on average, Canadian issuers pay 1.5 times the cost of issuers in Britain, and 2.5 times of those in the U.S.

“A national regulator is important with regard to investor protection and enforcement, as well,” says Dawn Russell, associate professor and dean of law at Dalhousie University in Halifax and a member of the Crawford panel. “It’s important to have enforcement power that is truly national, given the nature of the problems that arise in the country.” IE