Provinces remain committed to securities reform, says Melchin

(January 29, 2004) Despite internal disagreement and a lack of support from Ottawa, the provincial finance ministers will continue working on ways to reform securities regulation, Alberta’s revenue minister pledged today.

“Reports of our death are greatly exaggerated,” says Greg Melchin, who chairs a six-member provincial steering committee on regulation created last year.

Since Michael Phelps’ wise persons committee (WPC) released its report in December, attention has focused on the creation of a single, national regulator, overshadowing the provincial ministers’ work.

Federal Finance Minister Ralph Goodale has hinted that he supports the WPC recommendations and has rejected a preliminary paper from the provinces that focused on a passport model.

But Melchin points out that the passport model was only ever intended as a first step. Besides, he said today in a speech to a securities industry conference in Toronto, the ministers have never fully communicated on what such a model might entail, or how it would work.

The delay on fleshing out details of the passport model is partly due to the number of provincial elections in Canada over the past year, said Melchin, which has led to “rotating players at the table.”

The ministers held a meeting last week in which Ontario’s new finance minister, Greg Sorbara, also apparently spoke out against the passport model. At the other end of the spectrum, Quebec remains strongly opposed to any kind of national regulatory structure.

Still, Melchin says the committee is united in its desire to keep meeting and to work for change. “We haven’t thrown anything off the table,” he told reporters.

“We’re studying the WPC report and are prepared to look at single regulatory structures,” Melchin says, admitting that the system needs restructuring. “I’m not satisfied with the status quo. We don’t have a clear, single voice and no national oversight.”

There are numerous options for reform, Melchin said, including a passport system that would keep the provincial securities commissions in place, a single federal or a federal-provincial model. “You could also have a single provincial system, without Ottawa, or you could have a single governance structure under the Canadian Securities Administrators.”

The provincial finance ministers have tentatively scheduled another conference call to discuss the issue in February. Despite a number of public pronouncements on securities reform, Melchin notes that Goodale has yet to approach the steering committee.

“We haven’t heard from him actually, there’s been no attempt to communicate with us, but we are certainly willing to meet.”

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