Friday, August 31, 2007

Show Some Spine Jim -- Stand Up to the Provinces

The Globe and Mail again reported on Jim Flaherty's support for a single Canadian securities regulator (article reproduced below). This is, as I have said before, an excellent idea for Canadians. It will increase protection for the public (who will be served by an effective, national regulator) and lower costs for businesses coming to Canada (who will only have to deal with one regulator and one set of rules). Taxpayers even win as ten bureaucracies are replaced with one.

But it is not going to happen if Ottawa waits around for the Provinces to voluntarily give up control over their regulatory empires.

Our Constitution gives Ottawa power over interprovincial and international trade, as well as matters of peace, order and good government, and the time has come for Ottawa to use these powers. Ontario -- which deals with the lion's share of the securities industry in Canada anyway -- has said it will be onside. Industry will be onside (except for a few provincial analysts who benefit from contracts from regulators) and the public is not going to rebel against this one. Even the Liberals and the NDP will fall in line -- the only real opponents will be the BQ and PQ.

Time to show some spine Jim and get on it with it. Pity you waited until so far into your minority mandate to do it.

Flaherty beats single-regulator drum

With files from reporter Katherine Harding in Edmonton

August 31, 2007

CALGARY -- Federal Finance Minister Jim Flaherty has again sharply criticized Canada's provincially run system of securities-law enforcement, calling the current structure inadequate and saying that a national regulator is desperately needed to protect investors and improve Canada's reputation abroad.

"We are the only industrialized country without a common securities regulator," he said yesterday in a speech to the Canada West Foundation in Calgary.

"For many, our system is seen as cumbersome, fragmented, slow and repetitive, and lacking the proper tools of enforcement."

Mr. Flaherty has warned several times this year that investors are ill-served by the current patchwork of 13 provincial and territorial agencies charged with enforcing securities law, but all of Canada's provinces and territories - except Ontario - have refused to get behind the minister's drive for a single securities regulator.

Print Edition - Section Front
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Instead, those provinces have moved ahead with their own "passport" system of regulation, where they retain separate securities commissions but recognize approvals granted by other participating jurisdictions.

However, the passport system does "not go far enough or fast enough" and is "simply inadequate for where Canada needs to be," Mr. Flaherty said, noting that Canada still has 13 separate securities regulators and a lack of national co-ordination.

The minister was scathing in his view of how Canada's security regulations are perceived internationally, saying: "Quite frankly, our reputation abroad is not strong - and I'm putting it mildly - with respect to securities enforcement."

While the provinces haven't given the national regulator proposal their blessing, they have said they're not opposed to a new panel that Ottawa is launching to flesh out the idea. Mr. Flaherty said he expects to announce the composition of the expert panel shortly.

Alberta Premier Ed Stelmach told reporters in Edmonton that Mr. Flaherty's latest plea won't do anything to budge his province's hard-and-fast position on the issue.

"I've agreed with other premiers, especially [B.C.] Premier [Gordon] Campbell, that we are committed to the passport system. Our position has not changed," he said.

Bill Rice, chief executive officer of the Alberta Securities Commission, told The Globe and Mail that the passport system does address the "fundamental complaints" of securities regulators, as it "substantively harmonizes laws across the country so participants need deal with only one regulator."

However, he conceded that Ontario's non-participation did pose problems for the passport system.

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