Goodale ready to move on regulatory reform

(January 27, 2004) Federal Finance Minister Ralph Goodale signalled today that he is prepared to tackle the thorny issue of securities reform and hinted he supports the national regulatory model outlined by the wise persons’ committee.

“This is going to take some detailed analysis and some ongoing dialogue,” Goodale told reporters following a speech in Toronto. He added that all the provinces, even those who don’t support a national regulator, would agree that the current system is “defective and inadequate.”

Goodale — who was appointed finance minister just six weeks ago — says he’ll be stressing to his provincial counterparts that a national regulator wouldn’t necessarily reduce the provinces’ powers.

“First of all, [the wise persons ‘ committee] did not recommend a federal regulator, it recommended a national regulator that would be put in place by the will and collaboration of all levels of government,” Goodale said.

“In that scheme of things, some provinces would have a bigger role and more authority than they do under the present state of affairs, where they simply default to Ontario.”

Goodale again flatly rejected the passport model that some provinces have been pursuing. He said although it represents a technical improvement on the status quo, “it really doesn’t get you very far on the road to a world-class system.”

The minister did not present a timetable for securities reform. Some industry leaders have expressed concern that if Ottawa does not act soon, the opportunity could be lost.

“This is not an issue that is usually at the top of the radar screen,” IDA president Joe Oliver said last week, adding that it’s unrealistic to think that interest will be sustained.

Oliver said he agreed with wise persons’ committee chair Michael Phelps, who has said that if nothing happens within a year after the next federal election, the issue would very likely fade away.

Goodale has been travelling across Canada conducting pre-budget consultations. In his speech today, he repeated a promise to deliver a balanced budget this year, although he added that might not be easy, given the mixed economic picture.

Job growth and consumer demand has been strong, he noted, boosted by low interest rates and tame inflation. But he said it will likely take at least a year before the economy fully recovers from last year’s shocks, such as SARS and mad cow disease. He also cited the rapidly rising loonie as a major downside risk.

“The government of Canada faces lower revenues than anticipated and a smaller surplus than we had anticipated,” Goodale said. “This discrepancy between previous projections and today’s reality means we could face a real challenge to balance our books.”

Debt reduction will also be an ongoing objective for the feds, Goodale pledged, as will health-care spending. “Short of going into deficit, we will do everything in our power to provide the provinces and territories with up to $2 billion in additional health-care funding this year.”

Filed by Doug Watt, Advisor.ca, doug.watt@advisor.rogers.com