Ontario on the right track with latest budget, says IIAC

Industry association highlights initiatives for capital markets, additional proposals for legislation

Ontario on the right track with latest budget, says IIAC

Even with a deficit of nearly $40 billion for the fiscal year ahead, the Ontario government’s recently unveiled budget drew criticism from advocates and lawmakers who say it falls short in many areas.

But in its response, the Investment Industry Association of Canada (IIAC) recognized the province’s effort to address crucial concerns, including some that predate and will go well beyond the current pandemic crisis.

“The Ontario government tackled several significant challenges in its provincial budget, most notably continuing to support families and businesses through the pandemic, providing a long-term path to balanced budgets that will be welcomed by investors and credit agencies, and improving the efficiency and effectiveness of the province’s capital markets to strengthen confidence and increase capital formation,” said IIAC President and CEO Ian Russell.

The association highlighted several figures to confirm the “magnitude of fiscal support” the province is committing to provide during the pandemic. In contrast to the $8.7 billion deficit in fiscal 2019-2020, Ontario unveiled a $38.5-billion deficit for fiscal 2020-2021, which was projected to ramp down to $33.1 billion, $27.7 billion, and $20.2 billion over the next three periods.

“The long-term public borrowing forecast is $54.7 billion in fiscal 2021-22 and $59.1 billion in fiscal 2022-23,” IIAC said. “Approximately 65% of 2020-21 borrowing has been completed in Canadian dollars through 37 syndicated issues, including the largest issue ever by a province in the Canadian dollar bond market and the two largest Green Bond issues to‚Äźdate by Ontario.”

The association highlighted several important announcements concerning the Ontario Securities Commission (OSC). Aside from amending legislation that would add competition and capital formation to the regulator’s mandate, the provincial government said it is moving forward with proposed amendments to create two distinct roles for the OSC chair and CEO, as well as separate the commission’s board and adjudicative responsibilities.

The government also announced plans to launch consultations for the upcoming draft Capital Markets Act and ESG disclosure, both of which draw from recommendations made by the Capital Markets Modernization Taskforce (CMMT).

IIAC also made note of several proposed legislative amendments, including:

  • Technical amendments to the Financial Services Regulatory Authority of Ontario Act, 2016 and the Financial Professionals Title Protection Act, 2019 that would clarify rules governing fees for activities related to title credentialling within the province; and
  • Future amendments to align certain provincial statutes with proposed legislation to modernize the OSC and with proposed changes to the Securities Act and the Commodity Futures Act.

 

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