A senior member of Alberta's new government has thrown his support behind the creation of a single securities agency, reversing the province's long-held position and rekindling hope that the logjam blocking reform of Canada's fragmented regulatory system can be removed.
Alberta Finance Minister Lyle Oberg said Wednesday that the current system of 13 provincial and territorial regulators is out of step with the needs of market participants and the rest of the world.
“I think we need to take a very serious look at how we can help legitimate business get ahead on the capital markets,” Mr. Oberg said in an interview.
Executives at publicly traded companies, bankers and investors alike have run out of patience with the existing regulatory regime and have warned that Canada risks losing investment dollars if it does not overhaul the system.
Mr. Oberg said he shares their concerns.
“We need to be competitive,” he said.
“If it's our rules per se that are stopping us from being competitive, then we change the rules.”
He would like to see the process begin with the creation of one enforcement agency that would be responsible for policing the markets nationwide.
Next, he said, he would like to see securities rules harmonized.
The need for a national regulator would not be as pressing if the provinces can set up a single enforcement agency that plays by one set of rules, he said. However, he added, he would not stand in the way of that happening.
Mr. Oberg said the initiative ranks among his top five priorities. His stance amounts to a complete reversal of the policy of former Premier Ralph Klein's government, which was opposed to the idea of a single regulator.
His comments were welcomed by Ontario officials, who have been pushing hard for the creation of a single regulator.
“I'm obviously very encouraged that the Minister is open to a solution,” Ontario Government Services Minister Gerry Phillips said in an interview yesterday. “We think it's clearly in the best interests of all provinces if we can find a way to compete more effectively globally.”
Ian Russell, chief executive officer of the Investment Industry Association of Canada, which represents most of Canada's brokerage firms, said the change of heart in Alberta is “hugely promising” and increases the chances Canada could see a national regulator.
However, Quebec Finance Ministry spokesman Jacques Delorme said yesterday the province has not softened its long-standing opposition to a single regulator, and still strongly supports the passport model, whereby regulatory approval by one province is accepted by the others. The model has been adopted by all provinces except Ontario, which is holding out for a single national regulator.
But Mr. Russell said a model for a national regulator proposed in 2005 could get off the ground without consensus from all provinces as long as a critical mass of key provinces were willing to join. With Alberta adding its support to Ontario, he believes such a critical mass would be present.
He said if Ontario and Alberta did move together, it could also lure British Columbia into the project.
“I think B.C. would be very quickly in behind,” he said. “Those two provinces have made enormous progress in dismantling their trade barriers. So if Alberta moves in that direction, I would think given the much closer economic ties between those provinces, B.C. would follow very much behind.”
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