The Canadian Securities Administrators’ (CSA) proposal to provide the Ombudsman for Banking Services and Investment (OBSI) with binding powers under enhanced CSA oversight is indicative of a strategic myopia that pervades the development of Canadian securities regulation and threatens to harm Canadian investors.
In evaluating the CSA proposal, the question has never been whether Canadian investors deserve effective dispute resolution. Of course they do.
Properly framed, the relevant question is whether Canadians are able to access the variety of advice and products they increasingly need.
This is of particular importance given that a significant number of Canadians are under enormous financial stress and lack access to financial advice.
According to the Financial Consumer Agency of Canada’s (FCAC) 2024 Canadian Financial Capability Survey, 60% of Canadians reported that they were either having trouble keeping up (19%) or sometimes struggled (60%) to pay their bills and meet other financial commitments. These figures were even higher for some demographics, including lower-income Canadians and women.
Additionally, the FCAC survey also found that most Canadians (65%) did not receive any free or paid advice on any financial matters over the previous 12 months. Only 18% of Canadians reported that they received advice concerning general financial planning. Those least likely to receive any advice included Canadians with lower education (72%), lower household income (71%) and a disability in the household (68%). The survey also found that only 49% of Canadians were financially preparing for retirement, down from 69% in 2019.
Like the FCAC, the CSA’s 2024 Investor Index found that there has been a shift away from the use of financial advisors concentrated in investors under the age of 45 and those with portfolios less than $100,000. Although these trends have many causes, increased regulation and related costs are a contributing factor that must be acknowledged when considering the CSA’s proposal.
C.D. Howe’s 2025 paper, “Regulatory Reset: A Policy Roadmap for Expanding Financial Advice to Middle- and Lower-Income Canadians” reported that, “As regulations have increased, compliance costs have climbed. Alongside this increase, we have seen a decline in access to advice for price-sensitive, lower-asset households.”
The C.D. Howe paper found that an escalation in regulatory “burdens” make serving mass market investors uneconomical. This is evidenced in higher minimum asset thresholds, which has resulted in reduced access to advice for price sensitive and lower-income households. The paper recognizes that Canada has yet to adequately address the cumulative impact of financial regulation.
Similarly, in 2026, C.D. Howe’s “Walking the Tightrope: Canada’s Financial Regulatory Scorecard, Year Three” found that regulation gives efficiency, competition and innovation marginal attention, while regulatory costs have an asymmetric effect, falling much more heavily on small firms.
As regulatory costs increase and access to investment products and services declines, it is imperative for Canada’s policymakers to consider the OBSI’s more diffuse impacts and how the CSA’s proposed amendments may further reduce investor choice and protection in the form of professional advice.
For example, have product shelves narrowed? Has advice become more standardized? Have threshold account minimums increased? Have smaller firms borne greater costs? Has access to advice declined among retail investors or any demographics thereof? Have direct benefits of investor redress been commensurate with the costs of increased regulation?
These questions fall on our government and regulators. When making a rule proposal, the Ontario Securities Commission (OSC) is statutorily required to publish a qualitative and quantitative analysis of its anticipated costs and benefits, identify alternatives considered and disclose significant studies or reports on which it relies. The OSC must also ensure that business and regulatory costs and restrictions on market participants are proportionate to the regulatory objectives of any proposal.
Despite having access to years of data, the OSC has not produced any substantive analysis on how the OBSI’s operations impact the cost and availability of products and advice.
Protection from misconduct is an important policy objective. Competition, choice, affordable advice and access to investment products are important to investors as well.
There are economic costs to regulation and those costs fall both on firms and on investors. A regulatory framework intended to protect investors can become counterproductive if the cumulative costs of that framework make it uneconomical to provide investors with the products and services that they need most.
Canadians deserve a policymaking process that acknowledges this dynamic.