TORONTO - The former judge chosen to lead the Ontario Securities Commission has the tenacity and skill to overcome obstacles in the way of Canada's historic transition to a national securities regulator, Ontario's finance minister said Wednesday.
"This is one of the most tumultuous and interesting times in the history of the regulation of securities both in Canada and Ontario," Dwight Duncan said in an interview Wednesday after he nominated Ontario Energy Board chair Howard Wetston to take over as head of Canada's largest securities regulator.
Wetston's extensive federal and provincial regulatory experience makes him the ideal candidate to lead during this transitional period as the federal government works to integrate most of Canada's 13 provincial and territorial securities regulators into a national body, Duncan said.
"He is certainly tenacious; he's passionate about securities regulation; I think its fair to say he's passionate about doing it right, which means creating a common securities regulator," Duncan added.
If the nomination is approved, Wetston, a former vice-chairman of the Ontario Securities Commission and head of the province's energy board since 2003, will replace OSC chairman and chief executive officer David Wilson, whose five-year term ends Oct. 31.
In addition the responsibilities usually assigned to the OSC chair, including overseeing Canada's largest stock exchange, Wetston will work with the Canadian Securities Transition Office to assist in the switch to the national body.
He will be expected to provide advice on how to set up the new regulatory body and to promote it among his provincial counterparts.
Ontario has been a vocal supporter of a national securities regulator and is advocating to have Toronto as its headquarters.
Alberta and Quebec are challenging the constitutionality of the plan in their respective appeal courts, and the issue is being dealt with in the Supreme Court of Canada. Both provinces say the federal government would be overstepping its bounds if it were to form a centralized watchdog to oversee all of Canada's capital markets.
Wetston's nomination sends a signal to the rest of Canada that Ontario wants the regulator to be inclusive of all provinces, Duncan said.
"He's a member of the bar in Alberta and Ontario, he speaks French, he's born in Nova Scotia and our view is that all of these facts combined constitute the precise skill sets needed to advance the creation of a common securities regulator," Duncan said.
"I think he will work with the other provinces and the national government to find ways to overcome some of the differences that exist today."
The nomination must now be reviewed by a committee overseeing government agencies. Wetston, a former Federal Court of Canada judge, declined to comment until his nomination is ratified.
His proposed term is three years, shorter than the five-year appointments of the past, because it is hoped the national regulator will be operating by 2012.
Duncan said there is a chance that Wetston, as head of the biggest regulator in the country, could become chair of the national body, but that possibility has not yet been discussed.
Canada is the only country in the G20 without a national securities regulator like the Securities and Exchange Commission in the United States. Critics contend the 13 provincial and territorial regulators in Canada create unnecessary red tape and raise the cost for companies who want to list their shares on Canadian stock markets.
Ermanno Pascutto, executive director of the Canadian Foundation for Advancement of Investor Rights, says he hopes Wetston will not focus all of his attention on the creation of a national regulator.
"If a new chairman leads the OSC into several years of doing nothing but waiting for the transition, then I wouldn't think you're going to have much of an organization to lead when it transforms into a national commission," he said.
Pascutto, who worked with Wetston at the OSC, said it is up to the chairman to set the agenda of the provincial regulator and that he was looking forward to learning Wetston's priorities.
Outgoing chairman David Wilson said Wetston's prior experience at the OSC will make him a worthy successor.
"Howard knows the OSC, the quality of its people and its work as an effective securities regulator,” Wilson said in a release.
“I offer my best wishes to him in the role of guiding the OSC through the immediate challenges of regulating the province’s capital markets.”
Wetston's resume is loaded with experience at both federal and provincial regulators.He has been chairman of the Ontario Energy Board since 2003, after a stint as vice-chairman of the OSC from 1999 to 2003.
During his time at the OSC, Wetston chaired a panel hearing on financial irregularities at the failed theatre company Livent.
He also sanctioned several board members at YBM Magnex International Inc. over a financial scandal involving possible links to Russian organized crime. YBM's board of directors included former Liberal premier David Peterson, who was exonerated in the case.
Prior to that, Wetston had a varied career including as a Federal Court judge from 1993 to 1999. Wetston's decisions at the Federal Court include a 1996 ruling that gave prisoners the right to vote in federal elections.
He was director of the federal Competition Bureau from 1989 to June 1993, where he focused on busting up monopolies. He won several legal victories against multinational corporations including Xerox and Chrysler Canada.