"The Wise Persons Committee has made a signal contribution to solving the single most important problem faced by Canadian capital markets - our fragmented regulatory system. The Committee has produced a strong, clear, unanimous set of recommendations on what needs to be done.
The Committee is to be congratulated for the hard work its members have done under their chair, Michael Phelps.
Now everyone else has to work equally hard to get the job done.
I am confident that the job can get done because, as the Committee's report makes clear, there is now a broad national consensus for a single national securities regulator.
That wasn't true two years ago. When I first spoke out on the issue in August 2001 in Saskatoon there was widespread recognition that our national competitiveness was being blunted by our having 13 separate securities regulators instead of a single regulator, like every other industrial economy. But, as Andrew Willis of the Globe and Mail noted at the time, "There was no Canadian voice calling out for this country to catch up with the rest of the planet."
In the two years since I spoke in Saskatoon, every national financial organization has spoken in favour of reform. Stakeholders have also made clear their view that having 13 regulators instead of one is holding this country back.
What was lacking was a precise proposal that could reconcile the competing views among governments, regulators and others.
Now, the Committee has filled this void. Its proposal for a single national regulatory agency with provincial participation on its board and regional offices to deal with the local issues represents a truly creative solution to this complex issue.
We agree with the Committee's approach.
We believe that a robust national regulatory agency that can both represent Canada abroad and build on existing local and regional strengths at home will represent a real gain for every Canadian and for our capital markets.
Let me also congratulate provincial and territorial regulators for the contribution they have made in helping to make this issue ripe for solution.
In parallel with the Wise Persons Committee they have worked equally hard developing approaches that recognize the need for a better balance in securities regulation between our global and national interests on the one side and our local and regional interests on the other.
The draft Uniform Securities Act that was released yesterday by the Canadian Securities Administrators is an attempt, and a very useful one, to deal with the worst effects of regulatory fragmentation. Their work dovetails nicely with that of the Committee. As the Committee has noted, the CSA draft and its subsequent iterations can serve as the foundation for the single securities law that the Committee envisages.
In brief, as a result of the combined work of the Committee and provincial and territorial securities administrators, we now have an historic opportunity to strengthen our markets and change the way global markets view this country.
If we are to succeed, it is important to recognize that the Committee report is where we begin, not where we end. The final result will almost certainly reflect the compromises inherent in any federal-provincial negotiation.
Of particular note in this regard will be the concerns of Quebec. There are two issues in particular that may require accommodation.
One is Quebec's legal system, based on the Civil Code, which treats commercial dealings differently from other provinces, where the Common Law is used. The second, of course, is the primacy of the French language in Quebec, which also has legal implications.
These differences have been accommodated before within a single national framework. Indeed, the decision at the time of Confederation to have two systems of private property law - the Civil Law in Quebec and the Common Law in the rest of Canada - was the accommodation on which Canada was created. We see no reason why these issues cannot be accommodated again, preferably within the structure set out by the Committee, but, if not, by other means.
What is needed now is to get down to work. That is not solely a task for federal and provincial regulators and governments.
It is also the work of those with the greatest stake in creating a simpler, more efficient market that will make us the competitive equal of any country on the planet - the entrepreneurs and investors who will benefit from the simpler, more effective and less costly national system of securities regulation that is now in prospect."
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