The Pros And Cons Of Canadian Financial Regulation

955 Words4 Pages
For some time now, the Canadian federal government’s efforts towards constructing a national securities regulator have failed. While the government’s primary objective has been to consolidate the nation’s regulation of securities markets, it has been met with almost undivided reluctance. The proposed federal regulator would streamline compliance, regulation, supervision and enforcement nationwide, would provide investors, dealers and firms with more protection from systemic risk, minimize redundant processes and costs, while also safeguarding the integrity and stability of the securities market. In spite of its seemingly good intentions, many deem the potential legislation to be unnecessary. In essence, the government’s call for a national…show more content…
This would in turn hand over regulatory, supervisory, compliance and enforcement power from provincial jurisdiction onto the federal level. While the national regulator would not oversee day to day operations, it would set harmonized imposable standards with regards to products, issuers, and firms and would have definitive power to order firms with regards to certain issues in order to minimize system risk (i.e. selling assets) (Mak). Regardless, provincial interests may be compromised and jeopardized altogether for the benefit of the Canadian economy. With that said, many provinces have been reluctant to adhere to such rule by Parliament and the proposed national regulator, as it could result in excessive (and very expensive) regulation and could lead to the dissolving of numerous local businesses and reduced employment within local financial enforcement departments. Provinces have been working hard to secure the traditions, customs, and expertise that are at stake with the proposed deal, to in essence protect the interests of their communities. The proponents of the national securities regulator strongly believe that the plan will enhance the Canadian capital market and its many stakeholders, not hinder…show more content…
The Montreal Gazette’s Pierre Lortie utilized a 2010 report developed by the Organization for Economic Co-operation and Development to dispel such beliefs. In the report, Canada was said to have the second best ranked securities regulation and investor protection worldwide. Furthermore, provincial financial ministers in Alberta, Quebec and Manitoba claim to have no necessity for a national securities regulator, implying that their provinces are self-sufficient, and don’t want rules and policies imposed on them with little to no value being afforded to them in return. The IMF has also commended the quality of Canadian securities regulation, despite its preference for a national entity and voice (Thibodeau, Brown). Some advocates of the current system seem to be sold on the fact that the proposed national securities regulator is Parliament’s futile attempt to put forward a national representative for international forums, in order to save face and maintain influence in international developments, and nothing
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