In its submission to the Expert Panel on Securities Regulation, the Canadian Bankers Association (CBA) called for the federal government to create a single securities regulator, a Canadian Securities Commission, to enhance Canada’s competitive advantage internationally.

“We agree with the federal government that it’s time to take a fresh look at securities reform in the broader context of enhancing Canada’s ability to compete internationally,” says Nancy Hughes Anthony, President and CEO of the CBA “A single Canadian Securities Commission that would enhance efficiency, increase confidence in the markets and allow regulators to respond more quickly to market events would improve the productivity of the Canadian economy and our international competitiveness as a result.”

In its submission, the CBA notes that Canada can no longer afford to maintain the current system of 13 securities regulators with 13 sets of regulations if it wishes to remain competitive and attract global investment dollars.

According to data from the International Monetary Fund, if Canada were regulated and viewed internationally as a single market, it would rank after the U.S., the U.K, Japan, France and China. But broken down as individual provinces, which is what our current regulatory system does, Ontario’s market is smaller than Italy, Alberta’s is smaller than the Netherlands, Quebec’s is comparable in size to Denmark and B.C. is the equivalent to that of Ireland.

Moreover, the CBA says the passport model of securities regulation now in place outside Ontario is not delivering the benefits that a single regulator would.

“The existing passport model of securities regulation simply doesn’t deliver, especially for small- and medium-sized businesses (SMEs) and individual investors, particularly in Quebec and smaller provinces,” says Hughes Anthony. “Over 90% of capital market transactions take place in more than one province or territory so it makes sense that our regulatory structure should reflect this economic reality.”

In addition, the CBA’s analysis of public company data found that retail investors outside B.C., Alberta and Ontario are limited in their ability to participate in initial public offerings (IPOs). In the year before the passport system was implemented, retail investors in the remaining provinces were able to participate in between 67% and 77% of IPOs. Over the four years of the passport system, retail investors outside of the main jurisdictions, particularly in Quebec and the smaller provinces, have had less and less access to IPOs. However, under a single regulator, retail investors across Canada would have open access to these securities.

The fragmented system in Canada also has a negative impact on Canadian firms’ attempts to raise capital by imposing unnecessary costs, and this burden falls disproportionately on SMEs since there are clear economies of scale in developing and filing securities offerings.


The CBA says the International Monetary Fund, the Organization for Economic Co-operation and Development and Canada’s own Competition Policy Review Panel have all recognized the benefits of a single regulator for Canada since it would eliminate inefficiencies and reduce costs for market participants.

The CBA adds that of the approximately 100 countries that are represented on the International Organization of Securities Commissions, Canada is the only country without a national securities regulator.