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 (D-SIBs)
  • 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 supervisory role
  • Measures to support the development and growth of credit unions
  • The possible regulation of "national retail payment systems"

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.

Parliamentary calendar

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 requirements.

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