Canada: Canadian Deposit Insurance – Framework Under Review

Last Updated: October 7 2016
Article by Daniel Bénay and David H Gordon


On September 16, 2016, Canada's federal Department of Finance launched a consultation process on the deposit insurance framework. The consultation paper can be found here. The consultation process is to help determine whether the scope of targeted Canadian financial products requires adjustments to ensure the deposit insurance framework continues to serve Canadians effectively.

The review comes as a response to changes to the global banking landscape since 2008 financial crisis and, more specifically, changes to deposit products offered by financial institutions. The policy objectives relating to the review include protecting depositors, supporting financial stability and promoting efficient and competitive financial services.

Current Canadian Deposit Insurance Framework

Canada's deposit insurance framework is administered by the Canada Deposit Insurance Corporation (CDIC). CDIC has 80 members and is comprised of banks, federally incorporated trust and loan companies, federal credit unions, provincially incorporated trust and loan companies, and cooperative retail associations.

Canada's deposit insurance coverage framework consists of:

  • seven coverage categories
  • scope of eligible deposits
  • coverage limit

The seven categories of deposits to which coverage extends are:

  • deposits held in one name (individual)
  • deposits held in more than one name (joint deposits)
  • deposits held in trust for another person
  • deposits in Registered Retirement Savings Plans
  • deposits in Registered Retirement Income Funds
  • deposits in Tax Free Savings Accounts
  • deposits held in mortgage tax accounts

Coverage extends to:

  • savings and chequing accounts
  • Guaranteed Investment Certificates (GICs) and other term deposits of five years or less
  • money orders, travellers' cheques and bank drafts issued by CDIC members and cheques certified by CDIC members
  • debentures issued by loan companies that are CDIC members

The coverage limit has been $100,000 since 1983 (when it was raised from $60,000) and applies to deposits of up to $100,000 in each of the above seven categories. Therefore, by holding deposits in multiple categories, and with multiple CDIC member institutions, depositors can access coverage above $100,000.

Policy Framework Considerations

The Department of Finance Canada is seeking views on possible enhancements to the deposit insurance framework in three broad categories: streamlining deposit categories; updating the scope of eligible deposits; and addressing the complexity of trust deposits. The specific issues for consideration regarding each area are noted below. For each issue, the Government has proposed questions to solicit comments in the consultation paper.

Streamlining Deposit Categories

Mortgage Tax Accounts: Given the declining use of mortgage tax accounts, mortgage tax deposits may no longer warrant their own separate category of deposit insurance. To keep the deposit insurance framework current, the Government is considering removing mortgage tax accounts as a separate insured category of deposit.

Registered Products: Registered Retirement Savings Plans (RRSPs) and Registered Disability Savings Plans (RDSPs) do not receive the same coverage as other registered products. The Government is considering the addition of two new deposit categories for RESPs and RDSPs. This approach would ensure that every registered product would be equally covered up to the same $100,000 limit. Alternatively, all registered products could be amalgamated into one deposit category with a higher insurance limit.

Updating the Scope of Eligible Deposits

Travellers' Cheques: Given that CDIC member institutions no longer issue travellers' cheques, the Government is considering modernizing the deposit insurance framework by removing travellers' cheques as an eligible deposit.

Foreign Currency Deposits: Given that foreign currency deposits are widely held in Canada, the Government is considering the addition of foreign currency as an eligible deposit. To reduce complexity, any funds paid out to depositors holding eligible foreign currency accounts could be paid in Canadian dollars.

Temporary High Balances: Temporary high balances include large lump-sum payments such as payment received from an inheritance, an insurance payout, a divorce settlement or the sale of property. The creation of temporary high balance coverage in Canada would add complexity to the deposit insurance framework and increase CDIC exposure. Funds necessary to cover temporary high balances under deposit insurance could likely only be collected subsequent to a bank failure.

Addressing the Complexity of Trusts

Disclosure of Beneficiary Information: For CDIC to be able to quickly and accurately pay out deposit insurance, they need to have ready access to beneficiary information. Insufficient or incorrect beneficiary information may result in a reduction in coverage available to beneficiaries.

Brokered Deposits: Brokers can deposit funds either as an agent or in their own name in a trust for their client. Brokered deposits receive coverage differently depending on the approach the broker chooses. If the deposit broker acts as agent, the amount is considered part of the client's $100,000 limit in the individual category of deposit insurance. In the trust form, the client is a beneficiary, and coverage is dependent on the provision of accurate beneficiary information by the trustee to the member institution before the institution fails. In the latter case, brokers may be reluctant to provide client information to CDIC member institutions who are potential competitors. Therefore the Government is seeking views on how to ensure beneficiaries of brokered trustee deposits retain their coverage.


Written comments can be sent by November 30, 2016 to or to:

Financial Systems Division
Financial Sector Policy Branch
Department of Finance Canada
90 Elgin Street
Ottawa, Canada
K1A 0G5

To view the original article please click here.

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.

Similar Articles
Relevancy Powered by MondaqAI
Norton Rose Fulbright Canada LLP
Pallett Valo LLP
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Norton Rose Fulbright Canada LLP
Pallett Valo LLP
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

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