On March 26, 2024, the Government of Ontario released its 2024 budget: Building a Better Ontario (Ontario Budget 2024). Ontario Budget 2024 sets out various provincial initiatives including modernizing elements of the financial services sector in Ontario. Gowling WLG breaks down five important announcements as further described below.

Modernizing capital markets

To modernize Ontario's markets and foster competition, the Government of Ontario has stated it continues to collaborate closely with the Ontario Securities Commission (OSC) and the Canadian Investment Regulatory Organization to focus on innovation and economic growth while ensuring investor protection in capital markets. As part of modernizing Ontario's capital markets regulatory framework, Ontario Budget 2024 states that the government and the OSC continue to evaluate and implement recommendations from the Capital Markets Modernization Taskforce, which released its final report in January 2021 (the CMMT Report).

The government is working with the OSC to establish a framework to enhance both institutional and retail investor access to investment opportunities in capital‐intensive assets. Referred to as the Long‐Term Asset Fund, the framework is intended to foster access to opportunities such as infrastructure, natural resource projects and other relatively less liquid assets. The government is further supporting the OSC to modernize the dispute resolution framework available to Ontario investors. The OSC is working to develop rules governing the distribution of disgorged funds to harmed investors, and enhanced protections for whistleblowers designed to encourage individuals to report misconduct. Ontario Budget 2024 notes that an additional five recommendations from the CMMT Report are anticipated to be implemented in the province by 2025.

Fostering entrepreneurship

To encourage early‐stage financing, Ontario Budget 2024 states that the OSC is working to develop rules to support angel investor groups and broaden sources of capital through a self‐certified prospectus exemption. To support capital‐raising for smaller issuers, Ontario Budget 2024 sets out that the OSC is looking to broaden investment dealer participation in prospectus offerings.

Further, Ontario is promoting entrepreneurship and innovation by investing in additional Regional Innovation Centres (RICs), with a new RIC anticipated to be launched in Barrie. Ontario Budget 2024 describes RICs as non-profit organizations which play a vital role in the innovation ecosystem by ensuring entrepreneurs have the resources needed to start and grow their businesses, primarily fostering the growth and success of early-stage technology companies.

Auto insurance reforms

Ontario is proceeding with auto insurance reforms proposed to give Ontario drivers more affordable options and improved access to statutory accident benefits. Mandatory coverage will continue to apply to medical, rehabilitation and attendant care benefits but all other statutory accident benefits would become optional. Ontario proposes that Ontario drivers with access to certain benefits through their workplace benefit plans should not have to pay for the same benefits through their auto insurance. Ontario also proposes to make auto insurance pay for medical and rehabilitation benefits following an accident before drivers' extended health-care plans do.

To further address auto insurance premiums, Ontario has enabled a Test and Learn Environment to allow the Financial Services Regulatory Authority to revisit and modernize Ontario's territory rating approach to support fairer pricing for auto insurance by territories rather than by postal codes. The Territories Test and Learn Environment allows participating insurers to evaluate territory rate changes within the GTA over a minimum two-year period. The findings of this pilot may be applied to other regions.

Ontario Budget 2024 also addresses the growing problem of auto theft in the province, which affects auto insurers and premiums. Ontario proposes to spend $49 million over three years to support the Ontario Provincial Police's Organized Crime Towing and Auto Theft Team, which is working with municipal police services to dismantle organized crime networks. The funding will also support the Greater Toronto Area-Golden Horseshoe Investigative Fund and its mandate to put an end to the illegal export of stolen vehicles. Ontario will continue its prevention efforts with ongoing public awareness and education to combat vehicle theft.

Credit union access to emergency lending assistance

As part of an increased focus on the resiliency of provincially regulated credit unions and caisses populaires, Ontario Budget 2024 hails certain changes to be introduced by the federal government to benefit this sector. In its Fall Economic Statement 2023, the federal government announced its intention to amend the Canadian Payments Act to expand membership eligibility in Payments Canada to credit union locals that are members of a credit union central, among other participants in the financial services ecosystem. The Ontario government stated in Ontario Budget 2024 that it is optimistic about this amendment, which would enable eligible provincially regulated credit unions to directly access the Bank of Canada's Standing Term Liquidity Facility and its Emergency Lending Assistance. These changes will help to make Ontario's credit unions and caisses populaires more resilient, which supports their important role in extending financial services to people and businesses in urban and rural communities across the province.

Growth through research and technology

Ontario Budget 2024 asserts that innovation is essential to Ontario's long-term economic growth, where technological advancements across all industries help drive progress towards a more resilient economy. To help ensure researchers have the resources they need to commercialize innovations, the government is investing approximately $18 million over the next three years to support the ongoing operation and maintenance of Ontario's advanced research computing (ARC) facilities, including to ensure the systems are meeting demands for research into emerging technologies such as artificial intelligence. The province is also investing approximately $47.4 million to refresh infrastructure relating to ARC supercomputer systems at the University of Toronto and University of Waterloo, which systems can aid research into prescription drug manufacturing and climate-related questions.   

We will continue monitoring developments on these topics, including with respect to those which may be impacted by federal Budget 2024 scheduled to be released on April 16, 2024. Our professionals are available to assist stakeholders in any consultation processes and advise on any questions about these changes.

For any questions you may have about this article, the authors or members of our Financial Services Regulation Group would be pleased to assist.