Ontario government passes tougher securities laws

(December 10, 2002) The Ontario government has passed consumer protection legislation that gives the province’s securities regulator new powers to impose fines. Bill 198, first introduced in October, was given final approval yesterday at Queen’s Park.

The Ontario Securities Commission now has the authority to hand out fines of up to $1 million for securities offenders and order them to give up any illegal profits. British Columbia and Alberta also have the power to issue fines, but not to order the disgorgement of profits.

Maximum court fines for securities offences in Ontario are increased to $5 million from $1 million and maximum jail sentences rise to five years from two years.

“It is important that we set and enforce high standards to protect Ontario families and the integrity of our capital markets,” said Janet Ecker, the province’s finance minister, in a statement. “These measures will ensure that Ontario’s regulatory system is the toughest in Canada.”

The legislation also provides greater clarification of offences such as fraud and market manipulation, the finance ministry said, and gives investors the right to sue firms that make misleading statements or fail to disclose information.

The finance ministry also announced yesterday that it has received unanimous consent to withdraw controversial amendments to the Pension Benefits Act, originally included in Bill 198.

The amendments would have allowed negotiated pension surplus sharing agreements between employers and pension plan members. Employers would be given the choice of whether or not to pay out surplus funds in cases of a partial pension plan wind-up resulting from a mass layoff.

Critics accused Ontario of denying employees their rightful share of surplus funds. The province did an about-face on the issue after an appeals court ruled that laid-off Monsanto employees do have the right to a share of the firm’s pension surplus, a decision that counters the proposed legislation.

“This government has made a clear commitment to further consultation,” Ecker said yesterday. “We are committed to ongoing efforts with our stakeholders and determining the best steps to address the pension issue.”

Filed by Doug Watt, Advisor.ca, dwatt@advisor.ca