Supporters of a national securities regulator in Canada can only marvel at their good luck on Wednesday.
With Jim Flaherty’s resignation Tuesday, Canada’s biggest champion of a unified securities regulator is departing politics when so much of his initiative is incomplete. It would normally be a day for hand-wringing and dire predictions that the project will now die from neglect under a distracted new minister.
But as luck would have it, it would be hard to find a successor more likely to appreciate the merits of the cause than Joe Oliver.
Mr. Oliver is a former executive of the Ontario Securities Commission and – even more importantly – spent 12 years heading the Investment Dealers Association of Canada during an era when the IDA was not only the country’s brokerage industry regulatory organization, but also acted as the industry association representing brokerage firms. (Those roles were divided when the IDA was restructured into two new organizations toward the end of his term.)
The industry has long championed the creation of a national regulator to replace the current system of 13 separate provincial and territorial regulators across Canada, and Mr. Oliver was a staunch lobbyist and outspoken proponent of the idea. When he first ran unsuccessfully for federal office in 2008, he campaigned prominently on a pledge to use his background to help create a national securities commission, saying it was a key priority for Canada.
“There’s a lot of smart people in Ottawa but there aren’t many people with my kind of background, my expertise in securities regulation,” he said at the time.
That remains true even today, and especially among the ranks of his cabinet colleagues.
The project needs a defender like Mr. Oliver. So far, only Ottawa and two provinces – Ontario and British Columbia – have agreed to join the new co-operative capital markets regulator (CCMR) while other provinces have either rejected the idea or are still unwilling to commit.
The idea will proceed initially with just three participants, but the great hope is that more provinces can be convinced to join in to make it a far more effective national regulator.
In late January, the three governments participating so far announced a delay to the timeline for completing the legislation for the regulator. The new draft legislation is now due April 30 instead of Jan. 31, and drafted initial regulations are now due June 30.
Despite the delay, the three parties said they still anticipate having the regulator operating by July 1, 2015, which is the same final deadline announced last year.
The announcement in January noted that the extended timeline will allow time to pursue “active discussions with other jurisdictions” about joining in the project.
Mr. Oliver’s challenge will not only be to carry the football over the line to see the CCMR legislation passed and the organization created, but to win over broader support to see more key provinces join. It will be his chance to finally realize his long-term goal of using his time in Ottawa to champion one of his greatest causes.
Here’s a portion of a 2006 speech Mr. Oliver delivered on the merits of a national securities regulator at a conference in Whistler. His views remain as relevant eight years later:
“The debate about a national commission reminds one of Arthur Schopenhauer’s observation that all truth passes through three stages. First it is ridiculed, then it is violently opposed, and finally it is accepted as being self-evident.
“The idea no longer attracts ridicule. While opposition is still vigorous, opponents concede that if we were starting up now, no one would devise the current system.
“Momentum is building across the country for a Canadian Securities Commission, be it under provincial or federal jurisdiction. There is growing impatience with historical anomaly, territorial tenaciousness and political inertia. Arguments increasingly resonate about the need to enhance efficiency and competitiveness, to bolster enforcement, to present a united front internationally.
“There have been numerous false starts, but dare I suggest – and it may be the mountain air – that it is beginning to feel less like a matter of whether but when. If a pan-Canadian commission is finally established, commentators may be left to wonder why we didn’t achieve it much earlier, since its value is self-evident.”Report Typo/Error