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Not to be missed from the federal government's release of the long awaited Budget 2025 are the new details about the government's plans for open banking in Canada.
As we had written about (here, here, here and here), the previous federal government began laying the groundwork for open banking (also known as consumer-driven banking) with the release of the 2024 federal budget, the introduction of Canada's Consumer-Driven Banking Framework, and the enactment of the Consumer-Driven Banking Act (CDBA) in two parts. Part one received royal assent in spring 2024, establishing the foundational governance and scope of the framework but the plan stalled with the prorogation of Parliament in January 2025, leaving implementation adrift. However, with Budget 2025, the federal government has rebooted its commitment to open banking, signaling a renewed push to complete the CDBA and move the framework forward.
A Brief History of Open Banking in Canada
Open banking has long been a topic of interest in Canada's financial services sector. The concept centers on empowering consumers to securely share their financial data with service providers of their choice, including banks, credit unions, and fintechs. This data mobility enables consumers to access tailored financial services, aggregate their financial information, and make more informed decisions. Currently consumers who wish to share their financial data with third-party providers are often required to share their login credentials to enable service providers to pull information directly, which poses significant security risks.
Budget 2025: Key Updates and What They Mean
- CDBA Reboot and Data Mobility: The government has announced its intention to complete the CDBA, signaling a renewed push to finalize the legislative framework. This includes the introduction of a data mobility right under the Personal Information Protection and Electronic Documents Act, which will facilitate economy-wide data sharing beyond just financial services.
- A New Regulator: The Bank of Canada: One of the most notable changes in Budget 2025 is the delegation of oversight responsibilities for the CDBA from the Financial Consumer Agency of Canada to the Bank of Canada. This shift builds on the Bank of Canada's existing role in overseeing payment service providers and represents a consolidation of regulatory functions.
- National Security Safeguards: National security safeguards will be built into the CDBA, with CSIS and the RCMP tasked to help monitor and respond to potential threats. Their involvement ensures that consumer data shared through open banking is protected from misuse, fraud, and cyberattacks.
- Write Access and Real-Time Payments: Perhaps the most transformative announcement is the government's plan to accelerate the next phase of consumer-driven banking by legislating "write access", the ability for consumers to direct actions such as switching accounts or making bill payments and not simply transfer their data from one source to another. This functionality is expected to be legislated by mid-2027, contingent on the successful launch and widespread adoption of Canada's Real-Time-Rail (RTR) payments infrastructure in 2026. RTR will enable instant money transfers between accounts, eliminating wait times and unlocking new use cases for payments and financial services.
Looking Ahead
While much of the technical detail, such as accreditation criteria, API standards, and privacy rules, remains to be finalized through forthcoming legislation and regulations, Budget 2025 provides a clear signal that open banking is moving forward. The shift in regulatory oversight to the Bank of Canada, the inclusion of national security measures, and the planned rollout of write access all point to a more robust and integrated framework.
As Canada prepares for the launch of Real-Time-Rail and the completion of the CDBA, stakeholders across the financial ecosystem, banks, fintechs, regulators, and consumers, will need to stay engaged and informed. The next few years will be critical in shaping a secure, efficient, and consumer-centric open banking regime.
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