Ontario Drops Push for National Regulator of Securities, Joins Canada-Wide Passport System

Ontario Finance Minister Peter Bethlenfalvy says the province will fully join Canada’s unified “passport” system for securities, ending Ontario’s status as the lone holdout advocating for a national regulator.The move aims to simplify approvals, lower costs, and give investors faster access to funds, according to Bethlenfalvy. The decision was also backed by supportive statements from several federal and provincial finance ministers.“Joining the passport system will help streamline regulatory processes, reduce unnecessary duplication, and make it easier for businesses to access capital and operate across provincial borders,” Bethlenfalvy said on July 15 during a meeting of finance ministers in Charlottetown, P.E.I.He said the announcement represents a commitment by Ontario rather than an immediate change to securities law in the province, with details still to be negotiated.Bethlenfalvy added that he had told the Ontario Securities Commission to continue already ongoing negotiations and work toward the province fully participating in the passport framework.Passport SystemSecurities are investments such as shares, stocks, and bonds that are sold by businesses to raise money.Under the passport system, companies approved by their provincial regulator are generally also able to sell securities across the country without needing to fill out new paperwork in each jurisdiction.Ontario has been the only province or territory not participating in the passport system, reflecting its longstanding preference for a single national securities regulator rather than the current system of provincial and territorial regulators.While Ontario had formerly argued for a centralized regulator for the whole country, Alberta and Quebec have been two of the strongest opponents of a national regulator. Both argued that a national regulator could cut into the ability of provinces to make their own market decisions and lead to a regulator making decisions that might favour some provinces over others.Provinces and territories apart from Ontario signed a memorandum of understanding in 2004 that laid out the foundation of the passport system, which began operating for securities issuers in March 2008.Bethlenfalvy noted Ontario also expects that other provinces will keep reducing their red tape, saying the securities framework should be part of a bigger national effort instead of just a one-way concession on the part of Ontario.ReactionsB.C. Finance Minister Brenda Bailey said her province has been urging Ontario to join the passport system so that B.C. companies don’t need to obtain so many separate approvals when doing business in Ontario.“This is a major win for reducing barriers between provinces and territories, boosting investor confidence and strengthening the economy,” Bailey said in a July 15 release.Bailey added that companies and investors will both benefit significantly from less duplication, lower compliance costs, and quicker access to capital.Finance Minister François-Philippe Champagne also said the development helps create “a more connected Canadian economy.”“Thanks to Ontario’s leadership and the work of my colleagues in Québec, British Columbia, and Alberta, businesses will benefit for a simpler access to our capital markets,” Champagne posted July 16 on X.“Together we’re showing what we can do when we work across the country.”Ontario’s decision to join the passport framework comes as Prime Minister Mark Carney pledges to reduce interprovincial trade barriers and boost Canada’s economy amid ongoing uncertainty over trade relations with the United States.The United States declined to renew the Canada-United States-Mexico Agreement (CUSMA) to a full 16-year term earlier this month, saying there are deficiencies in the deal and trade deficits with Canada and Mexico that must first be resolved.CUSMA remains in force on an annual basis as negotiations continue.