Regional differences often create legitimate reasons for provincial leaders to question Ottawa-based initiatives. But not when it comes to whether Canada needs a single national securities regulator. On that file, the answer has always been as crystal clear as the ridiculousness of ongoing opposition to the concept.
Canada has become the laughing stock of global markets, conducting study after study to try to justify the creation of what every one of our major trading partners considers an absolute must. On Jan. 12, Tom Hockin, chairman of the latest blue-chip committee entrusted by Ottawa to study the matter, issued his report. His panel recommended that the feds go ahead and set up a national regulator, if necessary bypassing any provinces opposed. “The recent turmoil in capital markets has made it even clearer that Canada needs a single securities regulator that can move with greater speed alongside other domestic and international regulators to address financial instability,” Hockin noted.
Despite the report’s recommendation for Ottawa to retain provincial input, Greg Selinger, Manitoba’s finance minister, responded by saying he would consider jointly challenging any move in that direction with another province. Alberta Minister of Finance and Enterprise Iris Evans provided an obvious dance partner, vowing to “oppose, through all available avenues, including legal action if necessary, any move toward establishing a single national regulator.” And Quebec Premier Jean Charest dismissed legal opinions that the federal government already has all the authority it needs to create a national regulator on its own.
As these misguided forces were setting the stage for a costly battle, retail investors across the country caught holding controversial asset-backed commercial paper were finally expecting to recover money that they never should have lost. (They only expect to get it back after being forced to give up the right to sue the financial community for ethical misconduct.) And Nortel Networks was preparing to file for bankruptcy protection after years of accounting tomfoolery that went unchecked by the current patchwork system of market watchdogs.
Creating a single regulator will not guarantee that we will never again experience another Nortel, but not following the international standard greatly increases the risk. The status quo only makes sense if the goal is to promote Canada as a financial backwater.