In March, the Portfolio Management Association of Canada and CFA Societies Canada wrote to Ontario’s Minister of Finance, urging the province to join the Canadian Securities Administrators’ (CSA) passport system. Their case was familiar and strong: lower compliance costs, faster time to market and easier access to capital.
The industry has advanced versions of this case for years. It has not convinced Ontario to join. Nineteen years later, Ontario remains the lone holdout.
Ontario’s 2007 refusal rested on a defensible premise. The province wanted a single national securities regulator, which it believed would produce a more consistent and efficient system than a multilateral passport.
Passport, the OSC argued, would not eliminate duplication across 13 regulators, would not produce enough consistency and would weaken regulatory discipline by removing the ability of a regulator to opt out of another regulator’s decision.
Ontario preferred to wait for something better. But the national regulator never arrived.
The Ontario Securities Commission (OSC) now has a statutory mandate to foster capital formation and competitive markets. And Ontario has since made internal trade reform a public priority. It now owes the market, investors and other provinces a current justification.
Passport is a rare example — too rare — of Canadian capital-markets harmonization in operation. Every CSA member except Ontario uses it. A firm deals mainly with the securities regulator in its home jurisdiction, and that regulator’s decision applies automatically across the country for registration, prospectuses and exemptions. The underlying rules are the same national rules that Ontario already follows.
Passport is not about changing the rules. It is about changing which regulator applies them.
Since its decision, the OSC’s mandate has changed. In 2021, Ontario amended the Securities Commission Act to add fostering capital formation and competitive capital markets to the OSC’s statutory objectives.
Capital formation is not helped by adding an Ontario process to national rules. Passport is how the rest of the country turns those rules into practical market access. Ontario follows the rules but rejects the mechanism.
The amended statute and the holdout position point in opposite directions. Ontario has not explained why.
Captain Canada
The contradiction extends beyond the OSC’s mandate. Ontario is a party to the Canadian Free Trade Agreement (CFTA), the federal-provincial framework for internal trade. Its purpose is to make Canada function more like a single market. The CFTA’s new financial services chapter entered into force in April.
Ontario is now committed to market access and national treatment — fair treatment for financial services providers from other provinces — while continuing to refuse the most obvious instrument of integration in Canadian capital markets.
Ontario’s own political rhetoric makes the holdout still harder to defend. The 2025 Ontario budget identified interprovincial trade barriers as a drag on the Ontario economy. Finance Minister Peter Bethlenfalvy used his Empire Club address to promise Ontario leadership on internal trade. Premier Doug Ford has embraced the Captain Canada moniker. Ontario has publicly and repeatedly committed itself to internal integration.
Except on this issue.
Ontario’s strongest historic argument for staying out has been investor protection. That argument deserves to be tested against the record. Some observers will argue that passport would require the OSC to accept decisions made by smaller regulators with less capacity to handle novel or complex matters.
Under the current system, the OSC can refuse to follow another regulator’s decision. Passport removes that option. The concern is that Ontario investors would lose the benefit of an independent review by the country’s largest and best-resourced securities regulator.
That argument cannot be dismissed. But after 19 years, the evidence to support it has not emerged.
Passport jurisdictions have not shown a documented pattern of regulatory arbitrage or investor harm that Ontario’s additional review would have prevented. The principal regulator is determined by a firm’s head office, not by the firm’s preference. There is no simple shop-for-permissiveness model. The rules applied by the principal regulator are the same national rules Ontario helped write.
Investor protection is not strengthened by duplication unless duplication changes outcomes. Ontario may still believe its additional review protects investors. The public record does not show it.
Ontario does not have to join passport. It does have to explain why old reasons still govern new circumstances.
The 2007 case may have been defensible then. It is harder to sustain now. The national regulator never arrived, the OSC’s mandate has changed and Ontario has committed itself to internal trade and financial services integration. The province has not publicly squared those facts with its continued refusal.
The moment sharpens the question. Canada is making its most ambitious pitch to global capital in a generation — through the Major Projects Office, the Canada Investment Summit and Ottawa’s broader campaign to attract investment. The federal message is that Canada is one integrated economy. Ontario is the country’s largest capital market. A province that wants to lead on internal trade should not be the last holdout on securities harmonization.
Ontario can stay out of passport, but it cannot keep championing integration while defending an exception it no longer explains.