It’s Time for Ottawa to Fulfill its Responsibility on Systemic Risk and Market Enforcement

July 7, 2026 – With nearly every advanced economy establishing a dedicated framework to manage systemic risk in capital markets after the Global Financial Crisis, Canada remains an outlier. After Ottawa abandoned progress towards reform in 2021, it is time for our country to address the critical gaps left in its financial stability framework and its criminal enforcement capacity, according to a new C.D. Howe Institute report.

In “Finish the Job: Completing Canada’s Capital Market Reform Agenda,” authors Paul C. Bourque and Douglas M. Hyndman call for Ottawa to revive key elements of the unfinished capital markets reform agenda. Rather than reopening the long-running debate over a single national securities regulator, the report focuses on what tools are needed to manage systemic risk and strengthen criminal enforcement of capital market misconduct.

“There has never been a more important time for Ottawa to finish what they started,” says Bourque, Senior Fellow at the C.D. Howe Institute and former Alberta Deputy Minister of Justice. “US tariffs and Middle East conflict have made it clear how vulnerable Canada’s economy is to disruption. Completing the unfinished federal elements of capital markets reform would help build resiliency at a time when independence and competitiveness are critical.”

While Canada currently manages capital market risks through existing institutions and legislation, the authors contend that the system lacks national legislative authority, comprehensive data collection, the ability to set minimum national data standards and a clear point of political accountability. With securities trading outside public markets increasing and systemic threats ranging from cyberattacks to climate risk, Canada needs a stronger national capability to identify and respond to systemic risks in capital markets.

To address these challenges, the authors recommend that the federal government update the proposed Capital Markets Stability Act to be a stand-alone federal statute, complete consultations on the revised framework, and establish a federal agency with a national mandate and specialized expertise to collect and analyze financial market data and prosecute serious, complex capital market crimes.

“The federal government has both the authority and the responsibility to address systemic risk and strengthen criminal enforcement in capital markets,” says Hyndman, former Chair of the British Columbia Securities Commission and former CEO of the Canadian Securities Transition Office. “Ottawa should follow through on the responsibilities previously recognized by the Supreme Court of Canada and finally complete this unfinished reform.”

Read the Full Report

For more information, contact: Paul C. Bourque K.C., Senior Fellow, C.D. Howe Institute; Douglas Hyndman, former CEO of the Canadian Securities Transition Office; and Raquel Schneider, Communications Officer, C.D. Howe Institute, 647-805-3918, rschneider@cdhowe.org. 

The C.D. Howe Institute is an independent not-for-profit research institute whose mission is to raise living standards by fostering economically sound public policies. Widely considered to be Canada’s most influential think tank, the Institute is a trusted source of essential policy intelligence, distinguished by research that is nonpartisan, evidence-based and subject to definitive expert review.

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