Securities • Issues & Advocacy

Ontario criticized over passport stance

JANET MCFARLAND

Globe and Mail, May 29, 2007

TORONTO -- The Ontario government is sending a "controlling" signal to the rest of the country by refusing to join a new passport system for securities regulation unless other provinces agree to its terms, British Columbia's top regulator said yesterday.

The heads of securities commissions from B.C., Alberta, Manitoba and Quebec spoke in Toronto yesterday to try to build support for the proposed passport system on Bay Street - the centre of greatest opposition to the idea in Canada.

The passport model would permit companies and market participants to seek registration approvals in one province and have them automatically accepted everywhere else.

Ontario is the only province that has refused to join, arguing there must be a clear road map to evolve the system into a national securities commission in which each province and territory would have a single vote in its operation.

Doug Hyndman, chairman of the British Columbia Securities Commission, said Ontario has attempted to reassure the rest of the country that it would not dominate a national body. But he said the message is undermined by its demands to set terms for the passport's evolution before it will join.

"Ontario is saying, 'We want to control this, we want to exercise control.' That's kind of disappointing," Mr. Hyndman said. "I think ultimatums are not productive, in that kind of an environment, for making progress."

Alberta Securities Commission chairman Bill Rice said the passport system is simpler to use than the existing regime and will lead to faster decisions for applicants.

And while registrants will still have to pay fees to every province and territory, they will save money because they won't have to hire lawyers to prepare filings in any province except their home jurisdiction.

But some in the audience questioned whether the passport model will address all gaps in Canada's regulations.

"Is this a move to entrench the current multiregulator system," asked Doug Steiner, CEO of Perimeter Financial Corp.

Mr. Hyndman replied that the passport model is an effort to improve the existing system while politicians debate a national regulator.

Lawyer Phil Anisman told the meeting it is difficult to assess the passport proposal because there is no detail about how it would work for participants if Ontario does not join.

Mr. Hyndman said regulators are still discussing that question.

One suggestion, he said, would be a "one-way passport" in which Ontario companies could apply in their home province and have registrations automatically accepted elsewhere.

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