Ontario joins ‘passport’ system for public companies, ending push for national regulator

Ontario Finance Minister Peter Bethlenfalvy. Photo by Peter J. Thompson/National Post/File

Article content

The Ford government said Wednesday Ontario will join the rest of the country’s “passport” system for publicly traded companies, an important and long-awaited step designed to cut business costs and red tape.

Article content

In doing so, it ends the largest province’s push for a national securities regulator – a matter of disagreement between provinces going back more than two decades.

Article content

Article content

Article content

In practice, this means companies across the country will now be able to follow a standard set of legislative provisions in all provinces, while removing an important barrier to investment.

Article content

Article content

Ontario was the only holdout, with all other provinces and territories having previously agreed to mutual recognition under the passport system.

Article content

Peter Bethlenfalvy, Ontario’s finance minister, said during a Wednesday press conference the move will make businesses across the country more efficient and boost the national economy.

Article content

Speaking alongside his federal and provincial counterparts, Bethlenfalvy saluted their “national approach” during the ministers’ meeting this week in Charlottetown, P.E.I., and said he expects other provinces to follow suit in breaking down Canada’s other inter-provincial trade barriers.

Article content

“This is how Canada works,” he said.

Article content

The other provinces and territories signed a memorandum of understanding in 2004 to create the passport system, which came into effect four years later. The system was designed to make it easier for businesses so that they would only need to deal with one set of primary securities regulations while operating across the country.

Article content

Article content

But Ontario, the country’s largest province and home to the country’s biggest capital market, favoured a single national securities regulator based on voluntary participation, instead of a system of mutual recognition. Yet, other provinces were concerned that a single regulator would lead to a loss of jurisdiction.

Article content

Article content

Alberta and Quebec were most vocal opponents to Ontario’s preferred model, suggesting their unique economic profiles might be ignored by a national regulator.

Article content

But tariff threats from the United States to the Canadian economy over the past 18 months have placed extra pressure on provinces and territories to move past their parochial interests and make national markets more efficient.

Article content

Federal barriers to internal trade have largely been removed over the last year, but were never the biggest problem. The broader goal of knocking down trade barriers originating from provincial government, meanwhile, has slowed in recent months.

Article content