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Ontario Joins CSA Passport System, Industry Sees Milestone for Capital Markets

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Ontario Joins CSA Passport System, Industry Sees Milestone for Capital Markets

2026-07-31 08:00 UTCBy AlphaScala Research DeskSource reporting: investmentexecutive.comEditorial standards

Ontario Joins CSA Passport System, Industry Sees Milestone for Capital Markets

Ontario's commitment to join the CSA passport system ends a two-decade holdout. Industry leaders expect details in six to 12 months and push for fee reform.

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Ontario will join the Canadian Securities Administrators' passport system, a move industry leaders described as a milestone for capital markets and regulatory efficiency. The province had held out for two decades, preferring a national regulator that never materialized.

Andy Mitchell, president and CEO of the Securities and Investment Management Association, called the commitment “a huge milestone” for asset managers and Canada’s competitiveness. It is also “the catalyst for future change, future harmonization, future efficiency,” he said. Mitchell noted that regulators now talk about a “national regulatory system” rather than a national regulator. “If that’s how we’re truly defining it, then this is the final straw to fine-tune that [system] from here on out,” he said.

The passport system lets a market participant access capital markets across provinces by getting a decision from a single principal regulator. The approach streamlines registration, exemptions, and prospectus reviews. With Ontario outside the system, firms faced a duplicative process. Katie Walmsley, president of the Portfolio Management Association of Canada, said the change will “have very positive effects for the industry, for attracting and raising capital in Canada, and for the ability of firms to be nimble and responsive as businesses in terms of hiring decisions.”

Michael Holder, CEO of North Star Consultants Inc., described the announcement as “the final step in the first step toward a more national approach.” He said Ontario’s participation eliminates the need for additional review by the Ontario Securities Commission. “The registration process and approvals for both public issuers and investment firms should improve considerably,” Walmsley added.

Not everyone is celebrating. Laura Paglia, president and CEO of the Canadian Forum for Financial Markets, warned the announcement may be more ceremonial than substantive. Ontario already operates under a “de facto” passport system, she said. “If the public discourse is celebrating a formality as solving a problem or problems, it leaves the core problems intact.”

Industry leaders said the biggest immediate benefit is speed. Holder said firms will be able to get products to market faster because exemptive relief is centered on the principal jurisdiction. “It will reduce the amount of time that [registration or obtaining an exemption] takes, and therefore the amount of money it takes,” he said. Mitchell said the reduction in friction will free up resources for innovation. “We’re going to be working very hard with our members to come up with more [product] solutions now,” he said.

The passport system does not address fee structures, however. Paglia pointed out that “the funding and the money remains decentralized.” Provinces still charge their own fees even when the work is done elsewhere. “You still have provinces charging their own fees [to firms] or their own filing fees [to issuers] when the work is being done elsewhere, so we need to fix that disconnect, amongst others,” she said. Michael Thom, managing director of CFA Societies Canada, said fees should be a discussion. “Are you paying one fee, if you operate across the country, to one place, or are you paying 14 fees to 14 different places calculated on different variables?”

Mitchell said SIMA’s next big advocacy effort will be addressing CSA fees across the country. “There’s a real opportunity for discussion of what the cost is to run your business, launch a product, serve the investor – do all those things.” He said the effort will involve provincial finance ministers and first ministers. “It’s not an easy task,” he said, over the longer term the group seeks “more transparency, more predictability [and] ideally some timelines to allow firms to budget their own growth and investment.”

Even with the passport system, provincial carve-outs remain. “You do have different laws in different jurisdictions,” Holder said. “The passport system doesn’t solve for that problem.” He suggested the next step should focus on reducing those carve-outs and consolidating rules. Thom said it is time to “dare to dream a little bit” about further harmonization. First, the OSC must formally sign on to the national instrument expeditiously. “The system works well for every other province and territory. I don’t think there’s need to reinvent the wheel,” he said.

Matthew Latimer, executive director of the Federation of Independent Dealers, said he would like a fixed date for Ontario’s entry and “some results, measurement or information about changes” that arise from the development. No timeline has been set. Mitchell said he expects more details over the next six to 12 months. The OSC said in a statement that it “look[s] forward to continuing discussions with members of the Canadian Securities Administrators, and our government, about the terms of Ontario’s participation.”