Overview
For almost two decades, Ontario has operated alongside, but has not formally participated in, Canada’s “passport” system, which is a harmonized regulatory framework adopted by all other Canadian jurisdictions that provides market participants with a streamlined filing, review and approval process for many important securities filings. Ontario’s conspicuous absence in the passport system may soon change.
On July 15, 2026, Ontario’s commitment to join the passport system was announced, which will achieve greater regulatory harmonization across Canada and is an important step towards removing outstanding interprovincial trade barriers.
This Cassels Comment examines Ontario’s historical reasons for remaining outside the passport system and the potential implications of Ontario’s participation for Canadian capital markets.
Background
Canada does not have one single securities regulator. In 2004, the Canadian Securities Administrators (CSA, which is an umbrella organization of Canadian securities regulators that coordinates and harmonizes the regulation of Canada’s capital markets) introduced the passport initiative to streamline securities regulation across participating jurisdictions. Multilateral Instrument 11-102 Passport System (MI 11-102), which came into force on March 17, 2008, allows reporting issuers and registrants to deal principally with a single regulator, whose decision would be generally recognized by other participating jurisdictions.1 This framework was intended to reduce regulatory duplication while simplifying and improving access to Canada’s capital markets.2
Every Canadian province and territory, except Ontario, is a participant in the passport system. While Ontario has worked alongside the passport system through coordinated review processes, it has never formally joined. As Canada’s largest capital market, Ontario’s absence has been viewed as an obstacle to achieving the practical goals of the passport system.
Under the existing interface, the Ontario Securities Commission (the OSC) may act as principal regulator and its decisions may be relied upon in passport jurisdictions. Where a passport regulator acts as principal regulator and a prospectus is also filed in Ontario, the principal regulator reviews the prospectus and the OSC coordinates its review with the principal regulator. The principal regulator’s receipt evidences the OSC’s receipt if the OSC has made the same decision. Similar interface procedures apply to registration and exemptive-relief applications: the filer generally deals with the principal regulator, but the OSC makes its own decision for Ontario.3
Ontario’s reluctance to join stemmed largely from its long-standing support for a single national securities regulator as opposed to a multilateral passport model.4 Rather than viewing the passport system as a permanent solution, the OSC maintained that the proposal did not sufficiently address the fees, costs and duplication arising from 13 regulators, consistency in regulatory decision-making, or the need to modernize Canada’s securities regulatory structure. Although the OSC acknowledged that the passport system could provide “incremental administrative improvements and efficiencies,” it supported in the alternative efforts to establish a common securities regulator that would interpret, apply and enforce securities laws for all market participants consistently across Canada.5
Recent Developments
Over time, however, there have been shifts in Ontario’s policy priorities. In April 2021, Ontario amended the purposes of the Ontario Securities Act6 to include fostering “capital formation” and “competitive capital markets.”7 More recently, the Ontario government identified the removal of interprovincial trade barriers as part of its economic strategy, including in the 2026 Ontario budget.8
On July 15, 2026, the Department of Finance Canada announced Ontario’s commitment to join Canada’s national securities regulatory passport system following a meeting of federal, provincial and territorial finance ministers in Charlottetown.9 The federal government identified this commitment as an important step towards greater regulatory harmonization and reduction of outstanding interprovincial trade barriers. The Ontario Minister of Finance, Peter Bethlenfalvy, additionally stated that he had directed the OSC to build on discussions concerning Ontario’s full participation.10
Key Takeaways
- Improved efficiency of capital markets: Once implemented, Ontario’s participation is expected to reduce duplicative regulatory reviews by creating a more coordinated process that increases market participants’ access to all Canadian jurisdictions.
- Lower compliance costs and administrative burden: A streamlined approval process should reduce regulatory costs and simplify cross-jurisdictional filings.
- Harmonization of Canada’s capital markets and enhanced competitiveness: The reduction of regulatory friction may make Canada’s capital markets more attractive to domestic and international issuers and investors, and improve capital raising. Ontario’s participation would not, however, create a national regulator or, by itself, eliminate local securities laws, separate filing fees or provincial enforcement authority.
Looking Ahead
As of the date of this Cassels Comment, Ontario has not adopted MI 11-102, no effective date or implementation timetable has been announced, and no transition rules have been published. Important implementation questions remain, including the scope and timing of Ontario’s participation, the treatment of applications already under review, and which Ontario-specific requirements and fees will remain.
At Cassels, we will continue to monitor announcements from the Ontario government, the OSC and the CSA. If you have questions about how Ontario’s proposed participation may affect your business, please contact any member of our Capital Markets Group or Securities Litigation Group.
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1 Canadian Securities Administrators, “CSA Notice of Multilateral Instrument 11-102 Passport System, Companion Policy 11-102CP Passport System, and Related Consequential Amendments” (25 January 2008).
2 Canadian Securities Administrators, “Canadian Securities Regulators Finalize Passport for Registrants and a Streamlined Review Policy for Registration in Multiple Jurisdictions” (28 January 2009), online: Canadian Securities Administrators <www.securities-administrators.ca>.
3 National Policy 11-202 Process for Prospectus Reviews in Multiple Jurisdictions; National Policy 11-204 Process for Registration in Multiple Jurisdictions; National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions.
4 Ontario Securities Commission, OSC Notice 11-904, “Request for Comment regarding the Proposed Passport System” (28 March 2007), online: Ontario Securities Commission <www.osc.ca>.
5 Ibid.
6 RSO 1990, c S.5 (Securities Act).
7 Securities Act, section 1.1; Government of Ontario, “Modernizing Capital Markets in Ontario” (12 October 2021), online: <news.ontario.ca>.
8 Ministry of Finance, 2026 Ontario Budget: A Plan to Protect Ontario (Toronto: King’s Printer for Ontario, 2026), online: <budget.ontario.ca>.
9 Department of Finance Canada, “Minister Champagne Meets with Provincial and Territorial Finance Ministers in Charlottetown, Advances Internal Trade Through Key Harmonization Milestone” (15 July 2026), online: Government of Canada <www.canada.ca>.
10 Michelle Schriver, “Ontario Committed to Joining CSA Passport System: Champagne” (15 July 2026), online: Investment Executive <www.investmentexecutive.com>.