The Finance Paper is being released in connection with the
upcoming review of the federal financial sector legislative and
regulatory framework. Sunset provisions in the Bank Act,
the Cooperative Credit Associations Act, the Insurance
Companies Act and the Trust and Loan Companies Act
provide the opportunity for federal policymakers to conduct regular
reviews of this framework. These sunset provisions have
currently been extended to March 29, 2019. The Finance Paper sets
out the current landscape, identifies key trends influencing future
directions and seeks input from stakeholders on these trends,
related implications and areas for potential action.
The following three core policy objectives guide Canadian
financial sector policy and will provide context for the
stability: the sector is safe, sound and
resilient in the face of stress;
efficiency: the sector provides competitively
priced products and services, and passes efficiency gains to
customers, accommodates innovation, and effectively contributes to
economic growth; and
utility: the sector meets the financial needs
of an array of consumers, including businesses, individuals and
families, and the interests of consumers are protected.
The Department is seeking input from stakeholders on priorities
for the review and how to position the framework for the future.
The review will follow a two-stage process. Submissions received
during this first phase of the review will inform the development
of a policy paper setting out specific proposal for public comment
The Department has posed a number of questions for stakeholders
to consider in their submissions:
What are your views on the trends and challenges identified in
this paper? Are there other trends or challenges that you expect to
significantly influence the financial sector going forward?
How well does the financial sector framework currently balance
trade-offs between the three core policy objectives of stability,
efficiency and utility?
Are there lessons that could be learned from other
jurisdictions to inform how to address emerging trends and
What actions could be taken to strengthen the financial sector
framework and promote economic growth, including with respect to
the identified themes? How should those actions be
prioritized? For example: How should the financial sector
framework support innovation and competition while maintaining
stability of the system? How can the financial sector framework
best promote competition, including by encouraging new entrants and
fostering the growth of small entities and other players? How can
the benefits of an internationalizing financial sector best be
obtained while ensuring the safety and soundness of the
sector? How can the financial sector framework support
financial firms to best serve the evolving needs and interests of
consumers? Are Canada's federal financial sector oversight
bodies well-positioned to support the sector in the future?
What other actions should be taken to ensure the financial
sector framework remains modern and technically sound?
Stakeholders are invited to submit written comments by
November 15, 2016.
The Department notes that Canada's financial sector is
entering this review from a position of strength, after weathering
the 2008 financial crisis well relative to international peers.
Looking back, the Department points to the fact the Canadian
framework, including its approach to regulation and supervision of
financial institutions, was credited globally for the sector's
good performance under stress, a reputation that has benefited
Canadian regulated financial institutions. Looking forward,
the Department believes that the financial sector will have to
adapt to new trends, including emerging financial innovation and
technologies that will challenge existing business models, evolving
consumer preferences and customer relationships, changing
demographics, and continuing globalization. The Department believes
that this review will assess whether the financial sector
legislative and regulatory framework effectively supports growth
and positions the sector to meet the federal government's
policy objectives of stability, efficiency and utility.
The Canadian Office of the Superintendent of Financial Institutions ("OSFI") recently ruled that a bank cannot promote comprehensive credit insurance ("CCI") within its Canadian branches under the Insurance Business (Banks and Bank Holdings Companies) Regulations (the "Regulations").
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