Despite recent efforts to make the TSE a modern exchange, the markets are still facing the impact of regulatory differences among the provinces, says Barbara Stymiest, CEO of the TSX. She made the comments today during a luncheon speech in Waterloo, Ont.,

“One thing we haven’t been able to change is a 19th century regulatory system.” Although she said that provincial regulators have acknowledged the cost of regulatory differences, and have moved to harmonize securities regulations.

“So there are positive changes in the works. And I think there is a general appreciation that as a country we’re damaging our international competitiveness by holding onto a system that forces companies wanting to take full advantage of Canada’s capital markets to go through the same regulatory hoops thirteen times, instead of just once. And, frankly, this won’t change until governments, federal and provincial, resolve to do something about it.”

A whole new set of challenges has arisen in the wake of the collapse of Enron, says Stymiest. The facts that the Canadian Institute of Chartered Accountants has sought public input is heartening, she says. “The reason — as Bill MacKinnon of KPMG says — is simple. Self- regulation is no longer acceptable. The profession needs greater public oversight. I cannot imagine any profession taking such a strong stance even six months ago. But, then, it’s only in the last six months that people, stung by Enron, have come to profoundly distrust an array of corporate accounting techniques.”

She also went on to argue that Canada has created a huge competitive disadvantage for itself by undervaluing human capital. “We can’t attract the best minds to risk-taking in the knowledge economy if we don’t support them in the most fundamental way, with the funding they need.” With that in mind, Stymiest says one of the TSE’s main objectives in buying the venture exchange was to present a capital market continuum from start-up to global player.

“We’re way behind the U.S. on this. We have roughly half as many start-ups and half as many relatively new companies in the economy. But the U.S. has 18 times the number of potential gazelles being launched every year, compared to Canada. Why?”