The House of Commons Standing Committee on Finance called for the creation of a single, national securities regulator by mid-2007.

In its pre-budget report, which was tabled today, the committee called on the federal government to conclude an agreement with the provincial/territorial governments on a single securities regulator no later than March 31, 2007. It added that the regulator should begin operations no later than June 30, 2007.

The committee stressed the need for effective regulation generally, but it specifically focused on the securities realm. “We feel that there is a particular and urgent need to ensure smart regulation in the area of securities,” it said. “In our view, a commitment among the federal and provincial/territorial governments to a single securities regulator is needed.”

In other aspects of federal regulation, the committee recommended that the federal government undertake “a comprehensive cost/benefit analysis of existing and new federal regulations, as well as their cumulative effect, to ensure that their benefits clearly outweigh their compliance costs for business.” It said that this review should be completed no later than December 31, 2007. It also stressed that the government should take a leadership role and meet with the provincial/territorial governments, on a priority basis, with a view to eliminating unnecessary barriers to inter-provincial/territorial trade.

Among its other investment-related recommendations, it called for: the federal government to increase the labour-sponsored funds tax credit limit to $1,500; to create a tax incentive to encourage investment in microcredit initiatives; and, that the federal government, in consultation with the provinces and relevant stakeholders, undertake a comprehensive review of the Canadian retirement income system with a view to determining the adequacy of the system in meeting the retirement income needs of seniors.

The report says that the focus of the review should include incentives for saving, and the extent to which these incentives ensure that the financial needs of households are being met; incentives and disincentives to work by older Canadians in the retirement income system; and, it says it should review the deadline for converting RRSPs into RRIFs. The review should be completed by August 31, 2007, it says, and any legislative/regulatory amendments needed as a consequence of the review should be enacted by the end of 2007.

The committee also called for a comprehensive review of capital cost allowance rates in Canada with a view to determining the extent to which similar asset classes are treated equitably, Canadian rates are comparable with those in other countries, and rates reflect the useful life of assets. The government should also review the feasibility of eliminating the available-for-use and half-year rules, and should study the feasibility of reducing the capital cost allowance rate for oil sands projects to 25%, it says.