Canada: Important Financial Services Changes In 2014 Budget

The Economic Action Plan 2014, as the federal government calls its budget, tabled in the House of Commons on February 11, 2014 contains a number of statements regarding financial services regulatory reforms. This bulletin highlights the statements that are of particular interest to private-sector players.


The Government of Canada announced its intention to continue to adjust the housing finance framework to restrain the growth of taxpayer-backed mortgage insurance and securitization. Among these measures:

  • reduction of the amount of guarantees that Canada Mortgage and Housing Corporation (CMHC) is authorized to provide under its 2014 securitization programs to C$80 billion for market National Housing Act Mortgage Backed Securities and C$40 billion for Canada Mortgage Bonds; and
  • measures to implement Economic Action Plan 2013 initiatives to tie portfolio insurance to the use of CMHC securitization vehicles and prohibit the use of government-backed insured mortgages as collateral in securitization vehicles that are not sponsored by CMHC.


Following consultations in 2013 with the industry and other stakeholders, the government proposed to improve the ability of new entrants and small banks to compete. These measures include:

  • review by the Office of the Superintendent of Financial Institutions (OSFI) of the approval process for establishing a new bank with a view towards streamlining it; and
  • improvement of the ability of smaller banks to access funding from CMHC (e.g. CMHC's new allocation methodologies have refocused portfolio insurance and securitization programs towards small lenders).

Another potential measure contemplated would be to require large banks to provide access to deposit products from small federally regulated banks and trusts through dealers.


The government proposed to amend the federal regime for credit unions by establishing a streamlined process for amalgamating two or more provincial credit unions into one federal credit union. The government also proposed to clarify the federal mandate and announced that the joint supervision of provincial credit union centrals by the OSFI will cease. Consultations with provinces and the industry will be held regarding a two-year transition plan.


The government renewed its promise to establish a property and causality (P&C) demutualization framework that will provide for an orderly and transparent process and ensure that policyholders are treated fairly and equitably. Before introducing legislative and regulatory changes, the government will continue to consult stakeholders, suggesting further delay in the implementation of final rules.


The government is launching a comprehensive review of Canada's deposit insurance framework. The stated purpose of this review is to ensure that deposit insurance adequately protects the savings of Canadians in light of the lessons learned from the recent financial crisis and significant changes in the global banking landscape.


The government proposed to amend the Bank Act to create a regulation-making authority for banks regarding over-the-counter derivatives and financial benchmarks.


The government is developing a comprehensive risk-based approach to the oversight of the Canadian payments system. The government proposed to amend the Canadian Payments Act to introduce changes to the governance and accountability structures of the Canadian Payments Association and amend the Payment Clearing and Settlement Act to expand and enhance the oversight powers of the Bank of Canada. Public consultations are expected to be held in the spring of 2014.


The government referred to the Competition Tribunal's recent findings regarding the Visa and MasterCard networks and announced that it proposes to "work with stakeholders" to reduce credit card acceptance costs for merchants, while encouraging the merchants to lower prices for consumers.

The government will also consult stakeholders as a prelude to increasing the requirements of the Code of Conduct for the Credit and Debit Card Industry in Canada.


The government will introduce legislative amendments and regulations aimed at strengthening Canada's anti-money laundering and anti-terrorist financing regime and improving Canada's compliance with international standards. These amendments include:

  • introducing new regulations for virtual currencies, such as Bitcoin;
  • making online casinos subject to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act; and
  • enhancing the ability of the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) to disclose potential threats to the security of Canada to federal partners.

The government also stated that its financial sanctions regime requires improvement and proposed to adopt new administrative measures and legislative and/or regulatory amendments as necessary to increase the effectiveness of its regime and reduce the burden on the private sector, in particular, smaller businesses.


The government announced that it wishes to further increase its regulation of basic banking services, including the following measures:

  • changing the requirements for low-cost accounts;
  • expanding no-cost basic banking services for youths, students and vulnerable groups;
  • prohibiting charges for monthly printed credit card statements provided by banks; and
  • building Canadians' awareness of their right to cash Government of Canada cheques free or charge at any bank in Canada.


The Minister of State (Finance) will conduct national consultations to obtain Canadians' views on how to better protect consumers of financial products as a prelude to developing a "financial consumer code."


Payday Lending

The government announced its intention to work with the provinces to support their efforts to regulate all payday lending-type high interest products and maintain the integrity of the policy framework for such lending.

Collateral Charge Mortgages

Given the increasing number of consumers that choose collateral charge mortgages, the government will require enhanced disclosures to the consumers so that they better understand the costs and consequences of these mortgages relative to traditional mortgages.

Powers of Attorney

Acknowledging that seniors are more vulnerable to financial abuse, the government will require enhanced disclosures by banks to seniors on the costs and benefits of using powers of attorney or joint accounts and more robust bank processes and staff training.

Important changes and measures in the financial services sector are therefore expected over the coming months. Although the government sometimes states that it will consider the compliance burden on the private sector and even expresses an intention to reduce this burden on some levels, most of the proposed measures will add to the existing compliance burden of the majority of financial institutions. The government should take into account this compliance burden and operational realities applicable to financial institutions' retail businesses in implementing the proposed measures and amendments, especially with respect to consumer provisions.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
13 Dec 2017, Seminar, Toronto, Canada

Class actions across Canada continue to grow in volume and complexity, triggering significant policy and financial implications for businesses in Canada. With the Law Commission of Ontario’s recent announcement that it is reactivating its comprehensive review of class actions in Ontario, we may see important law reform on the horizon to evolve with the changing landscape.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions