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   SEPTEMBER 2020
  PAGE 18
EDITORIAL
   Toothless OBSI leaves investors wanting
The Investment Industry Regulatory Organization of Canada’s (IIROC) move to fund the Investor Protection Clinic, an investor legal-aid clinic at Osgoode Hall Law School, is a noble gesture. It
also underscores the dire state of affairs for aggrieved investors.
If there was an efficient, effective mechanism for resolving investor complaints, there’d be little call for a student-run clinic to help harmed
investors. Sadly, there is no such mechanism.
The Ombudsman for Banking Services and Investments (OBSI) was
supposed to fill that need, but has suffered a steady erosion of its author- ity over the years. Beginning in 2012, a succession of financial servi- ces firms began refusing OBSI’s compensation recommendations, thus exposing the impotence of OBSI’s “moral suasion” model.
Soon after the erosion began, OBSI lost its authority to investigate complaints involving segregated funds, on the basis that the funds are technically insurance products — a step that left harmed investors in jeopardy of falling through a needless jurisdictional divide.
OTTAWA
In 2014, OBSI surrendered its ability to investigate systemic issues, such as the widespread overcharging of clients that led to a succession of no-contest settlements between bank-owned firms and the Ontario Securities Commission.
OBSI has since grappled with many “low-ball” settlement offers. A 2016 independent review concluded these paltry offers stem from OBSI’s lack of authority to issue binding compensation decisions. The review stated “a more effective mechanism for securing fair redress” is required.
Investors are still waiting.
IIROC’s predecessor, the Investment Dealers Association, created OBSI when it and the Mutual Fund Dealers Association of Canada joined the Canadian Banking Ombudsman to create a unified dispute-resolution service. That was a meaningful step toward improved investor protection.
Funding Osgoode’s Investor Protection Clinic — which surely has helped investors and provided valuable experience for fledgling lawyers — still is a far cry from the sort of help harmed investors need.
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                                 What’s next after Trudeau’s
horrible summer?
BY GORD McINTOSH
economy is one thing. Shutting the damn hose off is another.
When the time comes to wean the population off government largesse, the Liberals will need every political skill they have. Watch for universal basic income to become part of the next Liberal platform as appeasement.
Something else to watch for: the Feds always gain power after a national crisis. This is why Trudeau is talking about national standards for long-term care.
Consider the aftermath of the Great Depression: the courts ruled unemploy- ment relief was under provincial jurisdic- tion in 1935, but William Lyon Mackenzie King waved enough cash at the premiers to get a constitutional amendment and create federal unemployment insurance in 1940.
In 2020, eyes will be on Trudeau him- self. Will he learn to curb his sense of entitlement and hubris?
Justin could learn from his father. Pierre Trudeau may have told 600 strik- ing truckers in Montreal “Mangez de la merde,” but his 15 years of power were free of personal ethics issues. With Justin now facing his third ethics investigation, per- sonal judgment appears to be his Achilles heel.
Justin needs a Cardinal Richelieu fig- ure behind him with the stature to tell him, “That’s a terrible idea, sir.” Pierre had Jim Coutts for that. Brian Mulroney had Derek Burney. Jean Chrétien had Jean Pelletier.
Until Justin Trudeau has a principal secretary who can tell the boss what he doesn’t want to hear, he will be plagued by avoidable mishaps. IE
  At the beginning of summer,
Conservative MPs probably were glad they wouldn’t have to worry about gov- erning the country in the aftermath of a worldwide pandemic and a fiscal deficit expected to hit $343 billion.
The Liberals, on the other hand, must have been champing at the bit for an autumn election.
The governing Liberals had hit 40% in some polls, and had been able to trans- form themselves from a chastened party clinging to minority status after last October’s vote to a dreadnought capable of winning public confidence during a pandemic.
Forcing an election during a pandemic normally is considered bad form. But any government would be tempted to win a majority with the main opposition party in disarray. Furthermore, the chaos south of the border made Prime Minister Justin Trudeau look like the Northern Messiah.
What could go wrong?
Then came WE Charity and a couple of brothers who aren’t likely to get their calls to Ottawa returned any time soon.
That, of course, set off a chain reac- tion after an agonizing summer that ended with the resignation of Finance Minister Bill Morneau, with “Minister of Everything” Chrystia Freeland replacing him and Trudeau hitting the reset button by proroguing Parliament until Sept. 23, two days after it was originally supposed to reconvene.
The Liberals will be able to get a clean start with a throne speech and, more importantly, will no longer be tortured by the opposition at committee hearings,
because committee mandates end with prorogation.
In fairness to the Liberals, WE was taking time away from important mat- ters of state like rebuilding the economy. Certainly, the affair should have been addressed before the Commons ethics committee, but not before the finance committee at the same time.
The Liberals probably have enough political capital to withstand the WE affair, especially with the universally respected Freeland in charge of economic recovery.
But Trudeau’s brand is tarnished after another ethics scandal for which the gov- ernment has itself to blame. None of this would have happened if Trudeau and his inner circle had been more careful. Restoring trust and confidence will be on the government’s to-do list until the next election.
Nonetheless, the greatest damage from the WE scandal will be a lost summer during which all parties could have been working on a national pandemic recov- ery plan.
As the Washington Post has noted, just like Sputnik put space exploration at the top of national agendas, the pandemic will do the same with health care.
This was supposed to a busy summer on Parliament Hill as parliamentary com- mittees made sure all Canadians were given the help they need before the House of Commons and Senate get down to work on a massive policy rebuild this autumn.
The WE scandal prevented needed preparation for a very tough parliament- ary sitting. Hosing money into a moribund
 





























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