Ontario’s 2025 budget arrived at a pivotal moment for global financial regulation. While other leading jurisdictions are embracing technology and proactive oversight, Ontario’s approach remains incremental and, in key respects, falls short of what is needed to ensure robust, modern capital markets.
The budget’s silence on regulatory technology (regtech) is a notable omission. Globally, regulators are leveraging AI and automation to identify market abuse and streamline compliance in real time. Ontario’s lack of a regtech mandate for its key regulators — the Ontario Securities Commission (OSC), Financial Services Regulatory Authority (FSRA) and Canadian Investment Regulatory Organization (CIRO) — means the province is not keeping pace with international best practices. Regtech is not just an efficiency tool; it is essential for proactive supervision and early detection of systemic risks.
While CIRO’s equity market surveillance team does monitor trading across Canadian marketplaces, including the TSX, and has expanded its oversight to include cross-asset surveillance, the system still relies heavily on traditional methods. The absence of a comprehensive, technology-driven surveillance framework is a missed opportunity to move from reactive enforcement to genuine prevention.
Enforcement powers and sanctions
The budget does propose expanding enforcement powers for CIRO, aligning Ontario with other provinces that allow for the court-enforced collection of fines and enhanced investigative tools. However, the level of financial sanctions remains modest. The maximum fine for individuals is still $1 million — a threshold the Ontario Capital Markets Modernization Taskforce recommended increasing to better deter misconduct.
Moreover, while CIRO’s collection rates for penalties against individuals have improved slightly (from 10% to 15%), overall collection remains low and enforcement continues to be more about post-incident penalties than pre-emptive deterrence. Without a stronger focus on prevention and meaningful financial consequences, these new powers risk being more symbolic than substantive.
Investor protection and complaint handling
The budget does little to modernize Ontario’s approach to investor protection and complaint resolution. The current system is fragmented and slow, with no unified digital portal or streamlined process for handling client complaints. While CIRO and OSC have rules for complaint procedures, there is little evidence that complaints are properly analyzed for early warning signs or systemic issues. It remains unclear to what extent the OSC tracks and leverages client complaints as a tool for market oversight.
The ongoing debate over granting binding authority to the Ombudsman for Banking Services and Investments (OBSI) further underscores the congenital lack of decisive action. While seemingly interminable consultations take place, there is no clear timeline for empowering OBSI to deliver binding decisions, leaving many consumers without effective recourse.
Technology investments
The government’s rhetoric about making Ontario a magnet for global capital rings hollow when the 2025 budget does nothing to modernize or enhance the province’s capital markets. While the budget references investments in emerging technologies like AI and blockchain, these are thinly scattered across multiple sectors and lack any targeted strategy for financial services. There is no dedicated funding or policy support for blockchain-based clearing, smart contracts or tokenized assets — innovations that are rapidly transforming capital markets in leading jurisdictions such as Switzerland, the U.K., Singapore and the UAE.
Jurisdictions that are serious about attracting capital are actively piloting digital asset infrastructure, launching regulatory sandboxes and providing legal clarity to foster innovation and investor confidence. In contrast, Ontario is only offering symbolic gestures rather than the strategic investments needed to compete globally. As other markets race ahead with bold initiatives that make their capital markets more efficient, transparent and attractive to investors, Ontario risks being relegated to the sidelines — undermining its own ambitions and legitimacy as a financial centre.
B.C. and Quebec
While Ontario’s budget neglects modernization, British Columbia and Quebec have at least made some efforts to digitize regulation and deploy regtech, although tangible results are not yet obvious.
The British Columbia Securities Commission is overhauling its internal systems through a multiyear digital transformation project, optimizing data management and regulatory responsiveness. It has also sponsored regtech hackathons since 2017, targeting blockchain, smart contracts and investor protection tools — directly engaging innovators to solve compliance challenges.
Quebec’s Autorité des marchés financiers (AMF) partnered with Mila — a world-leading AI research institute — to integrate machine learning into market surveillance and consumer protection. In 2017, the AMF established a fintech lab to explore blockchain applications and regulatory sandboxes, collaborating with global consortia like R3 to advance distributed ledger technology.
The AMF implemented binding complaint processing regulation in 2024, mandating standardized timelines, centralized tracking and systemic analysis of complaints to identify emerging risks — a model that ties consumer grievances directly to regulatory action. By contrast, Ontario’s system remains fragmented, with no equivalent requirements for analyzing complaints as early warning indicators.
In the current environment, there can be little doubt that Canada’s fragmented financial regulatory framework is a big problem. Three examples:
- Regulatory duplication: The CSA’s passport system reduces some redundancy, but key jurisdictions like Ontario maintain distinct rules, forcing firms to navigate multiple regimes.
- Scale diseconomies: The B.C. Securities Commission’s regtech tools and AMF’s AI systems operate in isolation, lacking shared infrastructure or data protocols. This fragmented approach inflates compliance costs and stifles pan-Canadian innovation.
- National framework: The inability of this country to rally around a viable forward-looking national capital markets regulatory framework is the product of petty provincial insecurities that cannot and should not be tolerated any longer. It is incumbent on Ontario in concert with the federal government to address this problem.
B.C. and Quebec demonstrate that proactive digitization and regtech adoption are achievable, but their efforts remain siloed. Without harmonized standards and shared platforms, Canada’s capital markets will continue to lag jurisdictions like the EU and U.K., where unified frameworks amplify regulatory effectiveness. Ontario’s inaction exacerbates this fragmentation, undermining Canada’s collective competitiveness.
What Ontario needs
Ontario’s capital markets policy should be anchored in a forward-looking strategy that includes:
- A clear regtech mandate for all financial regulators.
- Expanded regulatory sandboxes for AI and blockchain innovation in capital markets.
- Proactive, data-driven surveillance and early warning systems.
- A unified digital platform for financial complaints and dispute resolution.
- A consumer-first approach that makes retail investor protection a core priority.
Ontario’s 2025 budget was an opportunity to position the province as a leader in capital market modernization. Instead, it delivered incremental changes and left key challenges unaddressed. Without bold action on technology adoption, enforcement and consumer protection, Ontario risks falling behind as global markets move forward.
The province must seize the initiative — not just to keep up, but to lead. Until then, Ontario’s claim to be a world-class capital markets jurisdiction will remain unfulfilled.
Harvey Naglie is a consumer advocate and policy analyst focused on financial regulation.