As reported in our post on April 21st, the federal
budget speech released last April either announced or provided
updates on a number of regulatory initiates relating to the federal
financial services sector. These initiatives included:
A new consumer protection framework for banks and specific
targeted consumer protection measures
A bail-in regime for Domestic Systemically Important Banks
Restrictions on the use of Canada Mortgage and Housing
Corporation (CMHC) portfolio insurance and insured mortgages in
relation to securitizations
A review of the rules relating to the confidentiality of
supervisory information communicated to banks, insurance companies
and other federally regulated institutions and the oversight
provided by the various federal agencies that play have a
Measures to support the development and growth of credit
The possible regulation of "national retail payment
On May 7th, the government introduced Bill C-59 or
the Economic Action Plan 2015 Act, No. 1. Of the initiatives
mentioned above, confidentiality of supervisory information is the
only issue addressed in Bill C-59. Consistent with recent
practice, the government could introduce a second omnibus bill that
addresses all of the remaining issued noted above and any other
non-financial services measures from the budget speech that were
not addressed in Bill C-59. Conversely, the government could
revert to the past practise of introducing legislation that is
specifically directed at the financial services initiatives and
amends the applicable legislation, including the Bank Act, the
Trust and Loan Companies Act, the Insurance Companies Act and the
Cooperative Credit Associations Act.
At this point it seems unlikely that any of the measures that
were not included in Bill C-59 will be brought into effect any time
soon. Under the Parliamentary calendar for 2015, the last
sitting day before the summer recess is June 23rd.
Although in a normal year Parliament would reconvene on October
1st, as a general election will be held on October
19th, the House will not resume sitting until after the
election. Given the normal parliamentary process for passing
a Bill, including the requirement that a financial services Bill be
referred for study to the House Finance Committee, it would appear
the balance of the budget measures will not become law until this
winter at the earliest. Of course, if the election results in
a government other than a Conservative majority government, the
measures may be further delayed or completely abandoned.
This delay is, of course, unfortunate for financial institutions
that are looking for certainty in the regulatory framework.
Hopefully, despite the delay, the government will provide adequate
time for affected institutions to adopt their practices to the new
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