Finance Minister Ralph Goodale lambasted the current securities regulatory system today, but said he’s prepared to work toward its reform.

In a speech to the Toronto Board of Trade, he also indicated the government is committed to balanced budgets and debt reduction.

Goodale suggested that regulatory reform is necessary to create the conditions that allow businesses to thrive. “One area where we simply must do better is regulatory reform,” he said.

“Making our various regulatory systems more efficient allows small business to become more competitive and productive. More efficient regulatory regimes will also encourage much-needed investment from abroad, further boosting our productivity.

“And yet, as those of you in this room know better than most, it is tough to attract investment for a 21st century economy when you have to rely on a financial securities regulatory system based on a 19th century vision.”

He noted that the Wise Persons’ Committee recommended the creation of a single securities regulator, although he stressed, “not a federal regulator, but a truly national and inclusive one — a recommendation endorsed by many of you in the business community.”

“There is simply no doubt that the present system (the status quo) is cumbersome, fragmented and expensive. It discourages investment, increases costs and creates delays. It does not meet global standards. It does not meet 21st century standards,” he said. “I am more than ready to work with the provinces and all interested parties to see how we can best remove the impediments the existing system creates for Canadian entrepreneurs.”

Goodale also commented on the state of the economy, noting that private-sector forecasters currently suggest that economic growth in Canada in 2003 was a disappointing 1.6% half of what had been originally expected, due to all of those unexpected shocks.

“That’s the bad news. The better news is that the Canadian economy at the start of 2004 is showing some signs of improvement,” he said, citing strong employment growth, which in turn suggests “substantial underlying confidence in the Canadian economy”.

“Consumer demand remains strong and business investment is rising, boosted by low interest rates and inflation that remains well within the target band set by the Government and the Bank of Canada,” he said. The strong dollar remains the chief risk. “Last week, reflecting this risk, the Bank of Canada revised its 2004 growth forecasts down from 3.25% to just 2.75%. All of which means that the Canadian economy is going to take a while — certainly more than all of 2004 — to make up for the economic output that we lost in all the tough hits we had to absorb in 2003.”

“Given the range of views, before we introduce the budget, we will again survey predictions for economic growth by private sector economists for this year and beyond. The average of their revised forecast will form the basis for our fiscal planning in the budget,” he said.

The result, Goodale noted, is that the government faces lower revenues than expected and a smaller surplus than anticipated for 2004-05 and subsequent years. Still, he insisted, Ottawa will balance the federal budget “or better this year and as far into the future as we can presently foresee. To do that, and also to move forward on our agenda, we have to look at ways to refocus our spending… We cannot sustain government spending that grows persistently faster than growth in the economy overall as it has been doing in recent years. And we have to become more aggressive and focused in moving existing spending from lower to higher priorities.”

“No one should doubt our commitment to this effort. Where programs or services have outlived their usefulness, or could be done more efficiently elsewhere, they will be reduced, realigned, or eliminated,” Goodale said. “We need to take a much more results-oriented approach to how we use taxpayer money, one that delivers greater accountability, more transparency and better value for each dollar spent.”

He said Ottawa remains committed to debt reduction, “So let me say very clearly that a steady pattern of debt reduction will continue to be an ongoing objective of this government and this finance minister.”

He also indicated the government hopes to work better with provincial and municipal authorities to tackle big issues such as health care, and key urban issues (such as basic infrastructure, transportation, affordable housing and environmental degradation).