It is not surprising, and only mildly disappointing, that the government of Ontario would be the first to encourage a negative public response to the proposed merger of the London and Toronto stock markets. It’s an election year, and the Liberal McGuinty government will scramble to make political capital of whatever crosses its desk.
Still, there’s something shameless as well as anachronistic about the statements of Ontario Finance Minister Dwight Duncan.
For several years, he’s effused about Toronto’s prospects as an emerging global financial hub. He’s lectured parochial western Canadian governments that worry about losing their ability to regulate securities in their provinces. His government runs advertisements in numerous smart American magazines, portraying Ontario as an ideal business location. He has at service a powerful Securities Commission, along with other professional agencies, that can deal with the complexity of foreign investment initiatives. He’s a free marketer with a reputation to protect, and he was free to stand aside and let professional regulators respond to this merger proposal first.
Instead, Mr. Duncan was the first to worry about unknown impacts on jobs and to inflate the role of Dubai as a minority investor, saying: “We do business with the Middle East. I am just not sure I want them owning our stock markets.”
He’s linked this merger proposal to the failed hostile take-over of Potash Corp. in Saskatchewan by using that sticky term “strategic.” It would also be a significant merger. But it’s about private soft-ware and private and highly mobile professional skills—not rocks in the ground owned by the Crown on behalf of the people.
He has risen to prominence in a government obsessed with being modern, but he can’t grasp the first principle of great global business destinations—their governments don’t turn every topical business issue into a plebiscite. Indeed, if Ontario is going to go big, it will need to elect quieter governments.
There will be public hearings in Ontario and Quebec about the London-TMX merger and a full-fledged foreign investment review by the Government of Canada. There will be plenty of opportunities to expose and explain what must be tangible net benefits to Ontario investors, industries, and financial professionals.
One thing we don’t yet know, however, is whether the Ontario business community will speak up.
Historically, they’ve left public politics to the politicians—even when their vital interests are at stake. For instance, they mostly stood on the sidelines during the Free Trade and GST debates, and were silent when the last Ontario government abandoned its initial plans to privatize its electricity assets. It is not easy to respond decisively to vague fears with faith in free enterprise. However, if they want to be great, as Mr. Duncan would like, they ought to start asserting themselves.
For starters, they might gently suggest that their elected governments do their homework before stirring people up.
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