Faculty Blog

By Anita Anand

Globe and Mail September 25, 2018

The Ontario Securities Commission recently published a proposed rule banning certain commissions to dealers on mutual fund sales. The rule was not just Ontario’s initiative – it was a joint effort by members of the Canadian Securities Administrators (CSA), which consists of regulators from all provinces and territories. After months of discussions, which included the consideration of empirical data, the CSA finally agreed on the need to restrict certain commissions, with each of its members agreeing to implement the rule in its home province or territory.

Then, to the surprise of many, Ontario Minister of Finance Vic Fedeli expressed the government’s disagreement with the rule, ignoring the statutory process for making laws relating to the capital markets in this province. The Minister’s approach presents three problems. First, it undermines the rule-making process that is embodied in statute and has been the law for more than 20 years. Second, it fails to appreciate the important investor protection concerns that the CSA identified and sought to address. Third, it creates uncertainty in the capital markets, which the government of the day should be loath to do.

Last year, I wrote the following essay, as part of a collection of essays, "NAFTA and the Knowledge Economy", published by the Centre for International Governance Innovation (CIGI). The essay discusses what Canada’s approach to intellectual property in the context of the renegotiation of NAFTA should be. Since the issues are back at the table, I thought I'd post it again. You can read it on CIGI's website, download a pdf version, or simply scroll down.

No Time for Tinkering: How a "more progressive" NAFTA could break the vicious circle of global inequities in the ownership of knowledge

The postwar international trading order reflected the assumption that reducing various state-imposed restrictions on trade, and promoting free and competitive markets, would be mutually beneficial to trading nations and to the world as a whole.

Enhancing Governance in Dual Class Share Firms

by Anita Anand

            In a typical public company, shareholders can elect the board, appoint the auditors, and approve fundamental changes.  In other words, they can participate in the governance of the firm. Firms with dual class shares (DCS) alter this balance by inviting the subordinate shareholders to carry the financial risk of investing in the firm without providing them with the corresponding power to elect the board and exercise other voting rights. I argue that this misalignment of rights and risks should be subject to three modest reforms in order to enhance governance in DCS firms.

            The rationale underlying DCS is that they allow firm founders to protect themselves against a loss of control,[1] thereby ensuring that they can implement a long-term corporate strategy notwithstanding  short-term market pressures.[2] But the central question must be asked: to what extent (and for how long) should the law allow the founders to pursue their “idiosyncratic vision” for the DCS corporation?[3] 

In her New York Times bestselling book, Dark Money, Jane Mayer investigates the influence-peddling practices of the excessively wealthy class—e.g. Koch brothers—on US democratic institutions. She reveals, with a sense of alarm and foreboding, how corporate donors-cum-political ideologues have strategically purchased increasingly larger portions of the democratic deliberative process. Though located in the United States, these ideologues can extend their reach as far as money can buy, including across international borders, in Parliament and legislative assemblies here in Canada.

M103 Hearings and CPC Derailment