On March 22, 2017, the Federal government (the
"Government") tabled the 2017 federal budget (the
"2017 Budget"). The 2017 Budget provides guidance on the
Government's plan to introduce legislation in a number of areas
directed at the financial services sector in Canada, namely:
strengthening the bank resolution regime and the deposit insurance
framework; increasing oversight of financial market
infrastructures; enhancing the Canadian anti-money laundering and
anti-terrorist financing regime; supporting financial technology;
and introducing a new retail payments oversight framework.
Enhancing the Bank Resolution Regime
Following the 2008 financial crisis, a number of countries,
including Canada, began implementing bank recapitalization or
"bail-in" regimes. Bail-in regimes aim to reduce
tax-payer liability in the event that a domestic systemically
important bank ("D-SIB") is unviable by requiring certain
stakeholders to support the viability of such an institution by
conversion of their instruments into the common equity of the
financial institution. In 2016, the Government introduced
legislation aimed at the creation of a bail-in regime.1
While not yet in force, the key feature of this legislation is
that, where a D-SIB is failing, at the direction of the Government,
the Canada Deposit Insurance Corporation (the "CDIC") has
the power to temporarily control and convert certain shares and
liabilities of the financial institution into common shares.
While the Government continues the process of introducing a
federal bail-in regime, in the 2017 Budget, the Government proposes
to introduce legislative amendments to:
designate the CDIC as the resolution authority for banks;
clarify the treatment of eligible financial contracts in a bank
resolution process; and
strengthen the powers of the Superintendent of Financial
Institutions to set and administer minimum loss capacity
Deposit Insurance Review
In 2016, the Government launched a deposit insurance review
consultation with three broad policy objectives: streamlining
deposit categories; updating the scope of eligible deposits; and
addressing the complexity of trust deposits. Upon the conclusion of
this ongoing review, the Government confirmed its intent in the
2017 Budget to introduce legislation to update and enhance the
Canadian deposit insurance framework.
Financial Market Infrastructures ("FMIs")
The Government has signaled its intention to introduce
legislative amendments to expand and improve the oversight powers
of the Bank of Canada, pursuant to the Payment Clearing and
Settlement Act. These proposed amendments to the Payment
Clearing and Settlement Act would enhance the Bank of
Canada's ability to identify and respond to risks to FMIs, as
well as implement an FMI resolution framework to enable the Bank of
Canada to intervene in instances of potential FMI failure.
Anti-Money Laundering and Anti-Terrorist Financing Regime
The Government plans to introduce legislation to amend the
Proceeds of Crime (Money Laundering) and Terrorist Financing
Act (the "PCTFA"). The goal of these amendments will
be to expand the list of disclosure recipients to include the
Department of National Defence and the Canadian Armed Forces, as
well as support better intelligence regarding beneficial ownership
information. Proposed amendments also include a variety of changes
to enhance the PCTFA framework, support compliance and strengthen
the ability of reporting entities to operationalize the PCTFA,
while ensuring that the statute functions as intended.
New Retail Payments Oversight Framework
In addition to confirming the Government's commitment to and
support of financial technology, the Government has indicated that
it will release a consultation paper on a new retail payments
oversight framework in 2017. Based on the results of this
consultation, the Government will introduce legislation to
implement a retail payment oversight framework.
While the 2017 Budget does not provide detailed provisions, a
number of significant legislative amendments are likely to affect
the Canadian financial sector. Financial institutions should take
note as the Government moves to introduce the various regulatory
and legislative amendments proposed in the 2017 Budget.
1 An Act to implement certain provisions of the budget
tabled in Parliament on March 22, 2016 and other measures, SC 2016,
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 Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The Ontario Divisional Court recently provided guidance with respect to excluding co-parties from each other's examination for discovery. In Lazar v TD General Insurance Company, the defendant sought to examine the plaintiffs (a married couple) individually, outside the presence of the other.
The Divisional Court included in its analysis a review of the theory of deferred indefeasibility and the competing interests of victims of mortgage fraud within the context of the Ontario Land Titles Act (LTA).
Canadian cannabis policy announcements over the past year have spurred investment in licensed cannabis producers and dealers ("Licensed Producers"), resulting in one of Canada's newest growth industries.
Factoring is the legal relationship between a financial institution and a business selling goods or providing services to a trade customer, pursuant to which the Factor purchases the accounts receivable owing to the Client by its Customer.
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).