On October 5, 2023, the Department of Finance (Canada) launched a public consultation as part of its periodic review of the key statutes governing federally-regulated financial institutions: the Bank Act, the Insurance Companies Act, and the Trust and Loan Companies Act (the “Acts”). The consultation is seeking public input on 12 key questions relating to security and integrity, sectoral structure, consumer protection, framework modernization and federal-provincial co-operation.
The periodic review process for federal financial industry statutes was established in 1992. While these reviews initially took place every 5 years, they have more recently occurred at less regular intervals. The deadline for the completion of the current review is June 30, 2025. Comments will be accepted until December 4, 2023.
Questions for Public Comment
The public consultation is designed to elicit stakeholders’ opinions and insights on how the Acts (including related policies, legislation, and regulations) should respond to evolving trends in the financial sector. The 12 key questions are as follows:
National security and integrity
- What are emerging risks to the security and integrity of the Canadian financial sector, whether from national security threats, foreign interference, technological changes, or other developments?
- What if any additional measures are needed to protect the security and integrity of the financial sector and maintain Canadians’ confidence in their financial institutions?
Sectoral structure
- What would be the risks and benefits of potential consolidation in the federal financial sector?
- How should the federal legislative and policy framework adapt to protect Canadian consumers' interests and uphold the financial sector's integrity?
- What are the risks and benefits from the emergence of new financial services providers, and how should the federal legislative and policy framework adapt?
- Are changes needed to Canada's financial sector legislative framework, as federally regulated financial institutions continue to expand abroad, to ensure the sector continues to serve the best interests of Canadians?
Consumer protection
- What additional protections could help ensure Canadians receive high-quality, low-cost banking services?
- What barriers do Canadians face in accessing banking services, including cost barriers? How could these barriers be addressed?
- Do financial consumers benefit from sufficient protections when using innovative or digital financial products and services?
Framework modernization
- How could artificial intelligence and other innovations be used in the financial sector, and how should the framework adapt to harness the benefits and manage any risks and ensure responsible innovation?
- How can the framework be updated to ensure it remains effective, technically sound and reflects modern business practices and technologies?
Federal-provincial co-operation
- What role can the federal government play to improve and formalize collaboration with provinces and territories and ensure that Canada is better able to address pressing financial sector policy issues, given shared responsibilities for the financial sector?
Going Forward
As noted above, the consultation period ends December 4, 2023. Submissions are encouraged, to the following email legreview-examenleg@fin.gc.ca, with the subject line: “Financial Institutions Statutes Review.” More information is available in the federal Department of Finance consultation announcement.
The federal Department of Finance is also continuing work on digital assets, as part of the financial sector review and separate from this consultation. In a related development, OSFI launched a consultation on its draft Integrity and Security Guideline on October 13, 2023. While this process is separate from the Department of Finance consultation described above, it is related to Questions 1, 2 and 4 from that consultation. We will publish a post on the OSFI process shortly.
The author would like to acknowledge the support and assistance of Sandra Elashmouny, articling student at law.
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