Groups representing investment managers urge regulators to harmonize provincial securities regulations

Globe and Mail

23-05-2025

Groups representing Canada's investment management industry are urging provincial regulators to reduce interprovincial trade barriers by harmonizing their securities regulations.
CFA Societies Canada and the Portfolio Management Association of Canada argue in a letter sent Thursday to the Canadian Securities Administrators that significant differences in securities regulations between provinces are hampering the investment management sector's contribution to the country's economy.
'We believe 'the moment' Canada is facing both economically and geopolitically requires thoughtful but urgent action to address longstanding issues. A more harmonized securities regulatory environment in Canada will benefit the Canadian economy and the public interest,' says the letter to the CSA, an umbrella organization comprised of provincial securities regulators.
The Portfolio Management Association of Canada represents regulated portfolio management firms, while CFA Societies Canada represents the country's CFA charter-holders and its 12 member societies.
In recent months, federal and provincial governments have taken steps to remove interprovincial trade barriers and bolster the Canadian economy. Prime Minister Mark Carney has said that dismantling the barriers could help offset the effects of U.S. President Donald Trump's tariffs. The Ontario government introduced legislation last month to begin tackling such barriers.
'There's an incredible well of energy around not-business-as-usual-type thinking right now,' said Michael Thom, managing director of CFA Societies Canada, in an interview. 'And if we let that moment pass, it'll be gone, and we will all regret not having pounced on that moment.'
For instance, all Canadian securities regulators except Ontario have adopted a passport system that allows companies or individuals to deal with only one principal regulator when filing a prospectus or seeking exemptions.
'Ontario is the centre of Canadian capital markets, and so that represents a significant duplication of efforts and significant complexity for registrants to navigate,' Mr. Thom said.
In his view, the burden of fragmented securities regulations falls inordinately on investment managers, as more effort has been made to streamline the process for publicly traded companies.
Previous efforts to address regulatory fragmentation by creating a national securities regulator have failed. In 1935, the Royal Commission on Price Spreads recommended the creation of a pan-Canadian securities regulator. Since then, a number of attempts have been made to create such an entity, but none have succeeded.
The most recent of those attempts, dubbed the Capital Markets Regulatory Authority, had buy-in from five provinces but was staunchly opposed by Alberta and Quebec.
Katie Walmsley, president of the Portfolio Management Association of Canada, said good work emerged from that effort, even though the regulator never came to fruition.
'There's an inventory of these interprovincial differences that, with renewed effort, energy, resources, if somebody were to focus on, they could identify ones that would really make a difference to the Canadian economy,' Ms. Walmsley said.
But she and Mr. Thom aren't advocating for another attempt at a national regulator.
'I don't think we need it to accomplish the objectives that we've set out,' he said. 'Ultimately, you can achieve the same ends – a common, singular regulatory experience – through harmonization.'