Ontario’s 2019 Fall Economic Statement : Continuing the Modernization of Financial Services
On November 6, 2019, the Ontario government issued its 2019 Ontario Economic Outlook and Fiscal Review: A Plan to Build Ontario Together, continuing its efforts to modernize Ontario’s financial services sector. The measures proposed promise a regulatory landscape for financial services and pensions that is transformative – including delivering regulatory services more effectively, reducing regulatory burden, fostering a strong and competitive financial services sector and ensuring high standards of business conduct. To support its commitments, the government announced several reforms which are summarized below.
Putting Drivers First Blueprint
In an attempt to foster more competition in the auto insurance market, reduce sector fraud and bring down the cost of premiums for consumers and businesses, the government plans to:
- Support innovation and reduce barriers for new and existing companies to compete in Ontario;
- Increase consumer choice by allowing drivers to decide for themselves what coverage they need;
- Allow electronic proof of auto insurance on mobile devices to give drivers more choice and convenience;
- Leverage the new Financial Services Regulatory Authority of Ontario (FSRA) to reduce fees, replace inefficient processes and fight and prevent fraud;
- Implement FSRA’s new simplified rate approval system for auto insurance companies released on October 9, 2019, intended to reduce the time required for rate filings, enable insurers to be more responsive to market conditions, and make auto insurance pricing fair and accurate.
Modernizing Legislative Frameworks
- Securities and Capital Markets
The government continues to work with the Ontario Securities Commission (OSC) to support the Capital Markets Plan announced in Ontario Budget 2019. For a summary of key securities regulatory aspect in the Ontario Budget 2019, please see our previous article.
The government is introducing legislative changes related to securities and capital markets, including the repeal of the Toronto Stock Exchange Act and amendments to the Securities Act to allow the OSC to issue blanket orders.
The government also plans to initiate a general review of the Securities Act. To assist with this initiative, the government has committed to creating a securities modernization task force to solicit input from stakeholders for regulatory reform, including policy recommendations on competitiveness, regulatory structure and efficiency, and investor protection.
The OSC’s Burden Reduction Task Force will soon deliver its final report outlining the recommendations received and the initiatives it will undertake to reduce regulatory burden for businesses. For more details regarding the OSC’s Burden Reduction Task Force and its recent stakeholder consultations, see our previous article.
The government of Ontario reaffirmed support for the proposed Cooperative Capital Markets Regulatory System (CCMR). The CCMR is a cooperative regulatory framework based on agreements between the Federal Government and participating provinces and territories that aims to replace the current securities regulatory regime with a single harmonized regime across all participating jurisdictions. Current CCMR participants are Ontario, British Columbia, Saskatchewan, Nova Scotia, New Brunswick, Prince Edward Island, Yukon and the Federal Government. For more detailed information regarding the CCMR, please see our previous articles here, here and here.
- Credit Unions and Mortgage Brokers
Based on feedback received from the credit union sector, the government plans to replace the Credit Unions and Caisses Populaires Act, 1994 (CUCPA) with new principles-based legislation. This intent is for the new legislation to reduce regulatory burden for Ontario credit unions to make them to more agile and competitive.
The government is also considering the recommendations made in the report recently released on the legislative review of the Mortgage Brokerages, Lenders and Administrators Act, 2006. It plans to consult with industry and FSRA to determine how to make it easier for brokers and agents to support their clients, while helping grow their business and create jobs.
The Ministry of Finance will soon be consulting on a proposal to enable efficiencies in the pension regulatory framework, with likely legislative amendments to follow. The proposal includes an exemption of certain individual pension plans (IPPs) and designated plans (DPs) from the application of the Pension Benefits Act (PBA).
Protecting Titles for Financial Planners and Financial Advisors
As part of the 2019 Budget, the government introduced legislation to protect titles for financial planners and financial advisors in Ontario. The proposed new framework will require individuals using the “financial planner” and “financial advisor” titles to have the appropriate credentials.