IRPP: No National Securities Regulator Needed

The Institute for Research on Public Policy (IRPP) released a study by Pierre Lortie today concluding that Canada does not need a national securities regulator. The report details how decentralization has allowed flexibility in the different provinces, allowing them to respectively adopt best practices, and finds a higher degree of performance as compared to other nations.

One notable finding was that Ontario is not a participant in the “passport” system, which allows dealers to register and companies to file prospectuses and have them apply in all other jurisdictions. The report strongly urges Ontario to join this system for it to be more effective.

Lortie’s conclusion is unequivocal: Notwithstanding legitimate critiques of certain details in the functioning of the current system, Canada has by any measurable criterion a regime that is recognized as one of the best in the world. He finds no evidence whatsoever to support the notion that a national securities regulator would better serve Canada’s needs and interests.

The report also includes commentary by Thomas Hockin, who expresses some misgivings about the current system’s ability to react quickly to changes in global markets. He states that a national regulator would be a better at enforcement,improving investor protection.

Yet despite the harmonization and coordination that the Canadian Securities Administrators have accomplished, the existing passport system does not include Ontario. Markets are dynamic, and we must ensure our regulatory structure has the capacity to adapt to keep pace. In this modern era of sudden liquidity seizures, financial institution collapses and sovereign debt challenges, this topic has never been more strategically important for the Canadian economy…

It is clear that only a national regulator can reflect today’s capital markets, offer effective responses to systemic risks, effectively enforce securities regulation and represent Canada’s interests abroad. I am joined in this assessment by numerous expert reports and the international community. The federal government has made efforts to ensure that a CSRA would accommodate local needs, and provinces and territories would be well advised to work with the CSTO to ensure these needs are addressed.

The full report is available here, with a summary from IRPP here and coverage in The Globe here.



  1. Thank you for posting the IRPP study which re-affirms the important role public policy should play in relationship to strengthening the staus quo ante, in favor of co-operative federalism, under our Charter.
    At last (better late than never), there seems to be four well-defined pillars surrounding this case before the SCC: public policy, politics, power and persuasion and the Charter.
    This study has helped me to confirm the conclusion I reached 6 months ago—No National Securities Regulator Needed.

  2. Given Lortie’s background, did anyone expect him to conclude anything else? He has published the same conclusion many times over the years. That doesn’t make him wrong, but he’s hardly an objective observer.