Ontario will join the Canadian Securities Administrators’ (CSA) passport system — an integral and long-awaited step in harmonizing regulation across the provinces and territories.
The Finance Department highlighted* the news on Wednesday, after the finance ministers discussed shared priorities, including removing outstanding internal trade barriers, in Charlottetown.
Federal Finance Minister François-Philippe Champagne “was pleased to share, alongside his provincial and territorial counterparts, Ontario’s commitment to join Canada’s national securities regulatory passport system,” a release from Finance said. Ontario joining the CSA passport system is a “requisite step” in removing interprovincial trade barriers and growing “one Canadian economy.”
Ontario Finance Minister Peter Bethlenfalvy said in a LinkedIn post that Ontario’s participation represents “an important step” toward greater regulatory harmonization while maintaining investor protection. “We call on other provinces and territories to continue working together to advance a national approach that benefits businesses, investors and workers across Canada,” he said.
Bethlenfalvy also said he “directed the Ontario Securities Commission to build upon discussions for Ontario’s full participation.”
The CSA passport system facilitates access to capital markets across jurisdictions, and Ontario has been the only province that doesn’t participate in the nearly two-decades-old regime, given previous expectations of a single, national regulator. In recent years, however, the Ontario Securities Commission has had a statutory mandate to foster capital formation and competitive markets.
Earlier this year, the Portfolio Management Association of Canada, along with CFA Societies Canada, urged the Ontario government, in a letter to Bethlenfalvy, to reduce trade barriers by joining the CSA passport system.
“Ontario’s participation in the passport system framework would represent a significant step toward greater national regulatory harmonization,” the organizations said. “It would improve the efficiency of Canada’s capital markets, reduce duplication and lower compliance costs for issuers and registrants, while maintaining strong investor protection. Participation would also facilitate streamlined access to interprovincial investment opportunities and support a more integrated national capital market.”
In an email on Wednesday, Katie Walmsley, president of PMAC, said the organization was “delighted” with the news that Ontario will join the passport system. “This is a long-standing advocacy issue that PMAC and other stakeholders have been working on for many years,” she said. “It will, in effect, create a single regulator experience through a principal regulator.”
Michael Thom, managing director of CFA Societies Canada in Toronto, said via LinkedIn that he was “glad to see this step forward by the Ontario government, and grateful for the efforts of the many individuals and organizations who contributed to this policy change. We’re looking forward to working with the CSA to ensure harmonization in policy fully delivers harmonization in practice, and to examining additional opportunities for harmonization through all of legislation, policy and practice.”
Brenda Bailey, B.C.’s minister of finance, described Ontario joining the passport system as “a major win” for reducing barriers, boosting investor confidence and strengthening the economy.
“Businesses and investors can now access capital markets across all Canadian provinces and territories,” Bailey said in a release. “Decisions made by one province’s regulator can apply in all other Canadian jurisdictions. It is a confidence boost for businesses and investors who will benefit from less duplication, lower costs and administrative burdens and faster access to capital markets in our province and across Canada.”
In another welcome move this year, the federal government addressed regulatory red tape related to interprovincial trade by officially incorporating financial services into the Canadian Free Trade Agreement.
According to Statistics Canada, the sector category of finance, insurance, real estate and leasing accounted for about 11.8 % of internal trade in 2021 (the most recent breakdown available). This was second only to manufacturing, at about one-third.
A report from the International Monetary Fund projected that eliminating internal trade barriers could raise Canada’s GDP by nearly 7% over the long run, representing about $210 billion in 2025 dollars.
“Ontario’s expectations are that at the same time details of passport are being negotiated, other provinces will agree to continue eliminating all provincial barriers to unleash an estimated $200 billion to Canada’s GDP,” Bethlenfalvy said in his LinkedIn post. “This is not something that any province can do alone.”
The finance ministers’ discussion on Wednesday extended to Canada’s trade relationship with the U.S., with Champagne underscoring the importance of continued collaboration with both the U.S. and Mexico, the federal finance department said. Champagne also outlined key priorities for the upcoming federal budget, such as growing Canada’s energy, critical minerals, defence and artificial intelligence sectors.
Among other topics discussed was the new Financial Crimes Agency as well as opportunities to enhance beneficial ownership transparency.
*A previous version of this story stated that Federal Finance Minister François-Philippe Champagne broke the news that Ontario will join Canada’s national securities regulatory passport system. In fact, Ontario Finance Minister Peter Bethlenfalvy made the announcement. Return to the corrected sentence.