Equedia Letter

How Regulation in Canada Affects Both Companies and Investors11 min read

Comments (23)
  1. Myron Martin says:

    Very well written and justified observations. I agree that regulators tend to be over zealous and like all government tend to have a we “know better” and you need to rely on us to care take of you perspective that is not always in the best interests of the indiviodual. I would favour a “test” for anyone with at least $100,000 in investment capital to be able to prove they have the experience and willingness to risk their capital and make informed decisions, you certainly can’t get any worthwhile return with debt based fixed investments.

    1. Paul says:

      It goes both ways. Some investors complain when they lose on an investment and blame the regulators for not doing their job.

      Investors need to learn they are taking a risk. Don’t invest. If every stock was a winner, every one would be rich.

      Investors that complain that they lost money need to do better due diligence, and if they do, need to understand the risks involved with EVERY investment.

      Anyone up in arms and going to the SEC that Apple fell 50% in a few months last year? Nope. Why? Because they are a big name?

      Some people are idiots and shouldn’t be investing in the first place.

    2. http://www./ says:

      Happy Birthday! Quite the entertaining video you chose for this post. Nice choice. Also, the wit with which you respond to submitted questions is a delightful snicker as always.

  2. L Grapentine says:

    Regulation is excessive everywhere, almost certainly with the intent to cripple the economy; certainly those promulgating the enormous quantities of new regulations are aware of the effect. The most charitable theory one can offer is that they just don’t care. As for me, my inability to obtain share certificates representing my ownership interest in Canadian companies in combination with the new rules rendering bank deposits the property of the banks eliminates my interest in Canadian shares, since the failure of the banks will naturally cause the brokers to fail, and lead to the ownership of those shares by the banksters.

  3. Neil says:

    I totally disagree because Jim Flaherty would be picking
    one of his friends for the position. Jim Flaherty is Finance
    Minister and was when he and PM Stephen Harper
    caused 35 billion in investor losses by eliminating
    income trusts so that their friends could sell their
    companies insurance products. Flaherty and Harper
    have proven to be utterly untrustworthy.
    The province of Quebec does not want to join
    and would be excused and excluded from the ranks.
    How can you call it a national body when one province is
    left to do whatever suits them?

  4. Al says:

    I’m not particularly fond of regulators in general, as their ‘daddy knows best’ mindset irks me greatly, however I acknowledge that some degree of regulation is required and desirable, as I’ve no wish to be completely at the mercy of the sharks that would soon be preying on investors. I believe though that we’ve gone past that optimum point.

    Whatever their intentions are, I believe the regulators have strayed too far from their legitimate role of preventing frauds and scams. All investors know that they engage in a gamble when they buy shares in a company, and will have to bear their losses if the cards run against them.

    I do favour such rules as the ‘know your client’ rule, and action against brokers that break that one. It is a rule that is simple, clear, effective, efficient and easy to administer and enforce.

    I do not favour limiting investment opportunities to only institutions, governments, and the already-wealthy, as I see that as an unwarranted interference in my right to live my life as I choose. Nor do I favour any form of test, partly for that same reason, but also because it invites an endless stream of ‘tweaks’ and ever greater intrusions into the investment process.

    With the plethora of regulating bodies and the swamp of rules, it so confuses everyone that there is not only less protection, but a serious incentive for both companies and individuals to ignore the rules altogether, as well as for investors to assume far greater protection than actually exists.

    1. Leo says:

      Well said Al. However, I don’t agree with the “know your client” rule as this is too much of a grey area. Anytime an investor loses money, they can claim they didn’t know what they were investing in.

      But I think Mr. Lo is correct in stating that regulators are trying to do their job but they sometimes can overdo it.

      What they should be doing is going back to the criminals who literally have garbage projects and do nothing more than flog their crap stock.

      So many good projects have been brought down because of other badies. It really isn’t fair that the good companies share the same fate as the criminals.

  5. Jim says:

    Very thought provoking article. I think the key statement is that we need a voice in the regulating procedure that is looking out for the investors in junior miners. Right now the driving forces are the big banks/big investors. It is unfortunate that their goals often use the small investors as fodder. We need to get this message to the legislative/regulatory bodies so there won’t be so many unintended consequences to their decisions.

  6. Fredo Sanches says:

    Let me tell you this,The last thing I want is “help or protection” from any sector of the government. This qualified investor thing is only a way to make very valuable investments exclusive to people with money,they support the political parties and keep other people poor so that they/we can be bought/persuaded by the political meme with some goodies
    giving the politician the power they are always looking for.
    We senior population have to organize and demonstrate to the politician/government that we ARE NOT DEAD MEAT and will not tolerate the type of treatment they insist giving
    to us.We better start right now.

  7. Serge says:

    I find it is necessary; that there is need of a Special State Commission who controle seriously the working of the three mentioned Commissions.
    I think that I will take back may money invested in Canadian stocks and tranmit also your informations on all the Invester Clubs in Belgium

  8. don says:

    Every time the Government trys to regulate private business(fascism) ,they destroy it.

  9. margaet milne says:

    Timely and very informative and thank you.


  10. Neil says:

    In Canada, there is one and only one regulatory body for

    radio and television. Cable is also included. One and only

    one. One that will look after consumers. Right?

    No, that’s wrong. The CRTC (Canadian Radio and

    Television Commission) has given programmers the right

    to air unlimited commercials.

    Since there is only one commission, it is the same

    Canada – wide. Canadian cable subscribers get shafted

    while the Conservatives look after their business

    friends in the cable industry.

  11. Martin says:

    I agree with the change in definition of accredited investor.If anyone investing doesn’t know what the risks are they have only themselves to blame.Have then sign a legal document to protect other investor’s.Of course the rich don’t want to share there cake?

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  13. Fred says:

    This re-doing of existing work is in large a waste of money if the initial work was done by a large reputable mining company in the past. I agree that a few holes might be necessary to prove that you really are correctly oriented with respect to the deposit. Re-calculation of the reserves becomes redundant as well especially the fact that nothing is now accepted by the industry as real until it has been proven by computer and 100 pages of useless statistics. I have yet to see an ore reserve that has been improved this way. Reality gets transformed into something that cannot be understood by human beings– they cannot see the errors in it—yet the industry hates polygons where you can see where idiotic projections are being made.

    1. Gregory W says:

      Mother nature can and never will guarantee what a deposit looks like. But regulators, who have absolutely no idea of geology, can?

      Thats the problem

  14. peter says:

    I completely agree with Gregory W only to add, money invested by us is not being used prudently and ultimately comes as a direct loss to us. This is after the fact, it’s one thing to analyze a company it’s another that your having to factor in a debilitaing entity from the outside.
    Regulators are purely destructive and come in at an extreme cost to all investors.
    All par for the course !

    1. Tim says:

      Reading all of these comments, I must say that the majority of here are in favor of less regulation.

      But Paul, in one of the earlier comments made a very strong point: investors do complain when they lose money.

      Amateur investors are often the ones that bring everyone else down, blaming their loss on someone else. If people just took the time to look through sedar filings etc. they would understand a lot more.

  15. E cavicchia says:

    Absolutely not :
    If anyone finds a problem with a company and there is a stop trade, I cannot sell my stock to anyone, I am stuck with it Eg: Petrosonic Energy inc. The Alberta securities commission put a stop trade on it because it has “failed to file an annual information form for the year ended 31 December 2012” It is an international company that operates elsewhere in the world. So if this company decided not to operate in Canada at all I’m stuck with these shares . How is this protecting investors?? why not allow to sell but not Buy. at least you may re-coup some of the losses.

    1. Prince says:

      How can you sell and not buy? Someone needs to buy for you to sell to

  16. Feed Up with the Crying says:

    This is just another symptom of what our society is becoming. People do not want to take responsibility for themselves, it’s somebody else’s fault, not mine, I wasn’t greedy, I wasn’t lazy. Protectionism is systemic, big brother meddles more and more because we won’t take responsibility for ourselves. Is this what we want? Can you trust BB, my experience is certainly not! Are they competent? C’mon, they have no skin in the game and don’t even understand it. If you are willing to play in the sandbox then be prepared to get some sand in your eyes. Now, based on your economic status you are either included or excluded, regardless of due diligence or education. Only the rich are allowed to step up to the wheel, sad indeed. Take responsibility, jeez.

    1. Samuel P says:

      My thoughts exactly. Uneducated investors spoil it for all, blame the regulators all you want and you should to a certain degree, but if there’s more responsibility from an investors end, then maybe the regulators wouldn’t need to do so much with stupid rules

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