News

The federal government is launching a review of the much-ballyhooed task force created in 2003 to tackle white-collar crime, an admission that the agency has failed to live up to expectations.

The RCMP's Integrated Market Enforcement Team, known as IMET, was supposed to tackle major abuses that had given Canada a reputation as the Wild West of securities markets. But despite a couple of high-profile investigations, IMET's efforts have not led to major convictions.

The government announced in the budget tabled yesterday that it will appoint a senior expert adviser to the RCMP to help develop a plan to improve IMET's effectiveness.

"Results to date suggest room for improvement," the budget notes.

The review will include taking steps to enable IMET to attract and retain the best-qualified police and other expert resources, and enhance its collaboration with province securities authorities. The government also announced that it will boost IMET's 2008 to 2009 annual budget to $40-million from $30-million.

The previous Liberal government created IMET in 2003 amid high expectations that it would help restore the confidence of investors in Canada's capital markets by cracking down on stock market crimes. IMET has tackled most of Canada's biggest securities investigations, including Nortel Networks Corp., Royal Group Technologies Ltd. and Portus Alternative Asset Management Inc.

Superintendent John Sliter, director of IMET, was not available for comment yesterday.

Finance Minister Jim Flaherty said it is imperative that consumers' investments are protected.

"The government is encouraging competition by letting market forces play out, while ensuring that consumers are protected from anti-competitive behaviour," he said.

Mr. Flaherty also signalled that his patience is running out on the resistance of several provinces to cede their control over securities markets to a single agency. He said in the budget that he is counting on the co-operation of the provinces to create a single securities regulator. Ontario is the only province that has strongly endorsed the creation of a single regulator. However, Quebec and Alberta have long resisted such a move.

Mr. Flaherty reiterated in the budget that Canada simply cannot afford to have 13 separate securities regulators, making it the only jurisdiction not represented by a national regulator. He said he is inviting his provincial colleagues to establish a common regulator.

Mr. Flaherty also said a separate securities tribunal to adjudicate securities law disputes could also play a significant role in enhancing the independence of the enforcement process.