Federal Finance Minister Jim Flaherty will not be using meetings with his provincial counterparts this week to formally lobby for a single national securities regulator, according to a government spokeswoman.
But there could still be a lot of informal backroom discussions going on between meetings, a Department of Finance official said in a telephone interview from Ottawa. "It's not on the actual agenda, but that doesn't mean they don't talk to each other about it between meetings," she explained. "There are usually a lot of those informal discussions."
The issue has dogged Flaherty for more than a year now as he has tried to get the provinces to agree on a potential solution.
In the past, companies wanting to sell their stock in Canada needed to apply to each of the 13 provincial and territorial securities regulators for permission first. Critics argued it was a complex time-consuming system that discouraged using Canada's financial markets.
An agreement to implement a so-called passport system of regulation - where companies getting approved in one jurisdiction would automatically be accepted in the rest - was signed by the provinces and territories in September 2005, with only one holdout, Ontario.
With about 80 per cent of the securities transactions in Canada going through Ontario and falling under the jurisdiction of the Ontario Securities Commission (OSC), a battle loomed.
During a speech to the Economic Club of Toronto last month, OSC chair David Wilson argued a single national regulator made the most sense.
He explained the 13 provincial and territorial securities commissions, two self-regulatory organizations and the RCMP's commercial crime branch and Integrated Market Enforcement Team (IMET) have resulted in a "securities-enforcement mosaic."
That doesn't include the 13 provincial and territorial Crown prosecutors, all dealing with "different laws ... and different interpretations of the same laws," Wilson said.
"You may have your own description (of the situation)," he quipped. "While not a silver bullet, there is no doubt that a common regulator would improve regulation in Canada's financial markets. It seems all we need now is the will to make it happen."
The Council of Ministers of Securities Regulation, representing all provinces and territories except Ontario, pushed ahead last March with what it calls Phase 2 of passport implementation. Under the "one-way" passport, companies that receive approval in other jurisdictions, including Ontario, are automatically recognized everywhere else.
But Ontario has refused to grant such immediate status to companies that are approved in any of the other council member's areas.
"While we have made very good progress, we could do better if Ontario joined our efforts," Manitoba Finance Minister Greg Selinger, who is also chair of the Council of Ministers of Securities Regulation, wrote in the Financial Post last March.
"The Council of Ministers has been disappointed by Ontario's refusal to join the passport system," he said.
A Manitoba government spokesperson confirmed Selinger would be at this week's meetings in Montreal, but declined to say if the minister would try to discuss the passport system with Flaherty.
Meanwhile, Flaherty announced last February an expert panel, led by former cabinet minister Tom Hockin, would study the passport and single-regulator systems and report back by the end of this year.
Panelists have already held closed-door consultations with industry participants in several Canadian cities.
The panel is still accepting written submissions at its website (www.expertpanel.ca) until July 15.
(David Hatton can be reached at hatton@businessedge.ca)
