Investors Scrutinizing the Regulators

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Alberta key to single securities regulator, says Crawford

Doug Watt

 

(August 19, 2004) Persuading Alberta to support a single securities regulator may be the only way to move the reform process forward, says Purdy Crawford. The creation of a single regulator was the main recommendation of the Crawford committee's five-year review of Ontario's securities laws, released last year.

 

Ontario's standing committee on finance and economic affairs is holding public hearings on the Crawford report this week in Toronto.

"Ideally, one regulator would exist with a strong regional base, created by the federal government, the provinces and the territories," Crawford told the committee on Thursday morning. However, it's unlikely Ottawa will provide leadership and it's up to the provinces to get the ball rolling, he added.

"Even if two or three provinces come together, the feds will get on side," he said. "The key is Alberta. If Alberta and Ontario say they're going to have one commission, I think it will come together over time."

But he conceded it won't be easy convincing Alberta to join up with Ontario, noting that the province's politicians are "logically suspicious of what we [Ontario] are up to."

Although Alberta's business community may be supportive, Crawford says Ontario will have to bend over backwards to accommodate the views of other provinces, particularly Alberta.

Crawford's 300-page report made dozens of recommendations regarding securities law in Ontario, but the issue of a single securities regulator has been the dominant topic of discussion thus far at the committee hearings.

Yesterday, OSC chair David Brown said that Canada "simply cannot afford the duplication and overlap of 13 securities regulators when every country Canadians compete with has a national regulator."

IDA president Joe Oliver pointed to the "urgent need for decisive action and substantive improvement" to the current regulatory structure, though he did not explicitly endorse any of the reform models currently under consideration, such as the passport system, a national commission based in Ottawa or a national agency governed by the provinces.

In his presentation, Eugene Ellmen, head of the Social Investment Organization, also supported the call for some kind of national securities commission.

"The current system of harmonization through the Canadian Securities Administrators is fraught with difficulty and complicated," Ellmen said. "This is keeping Canada behind on a number of issues, such as corporate governance, social responsibility and environmental sustainability."

IFIC president Tom Hockin re-iterated his association's support for a single securities regulator. "Our industry needs consistent rules applied across Canada and we need it yesterday. Piecemeal reforms and incremental changes are not enough."

"Multiple costs make the Canadian market less attractive," he added. "There's no justification for a fragmented model."

Still, not all politicians serving on the standing committee are pleased with the focus on the single regulator issue. "We shouldn't waste too much time on this," said New Democrat MPP Michael Prue. "I think a national regulator is a great idea but this will be taken over by the federal government and we may not see it in our lifetime."

Filed by Doug Watt, Advisor.ca, doug.watt@advisor.rogers.com

(08/19/04)