On August 26, 2016, Canada’s Department of Finance (Finance Canada) launched a consultation process to review the legislative and regulatory framework of the federal financial sector. This follows the extension of the sunset provisions under the Bank Act, the Insurance Companies Act and the Trust and Loan Companies Act from 2017 to 2019.  

As the first of a two-stage consultation process, Finance Canada published a paper entitled “Supporting a Strong and Growing Economy: Positioning Canada’s Financial Sector for the Future” (Consultation Paper). It provides an overview of Canada’s financial sector and identifies key trends that may influence future directions in this sector.

The Consultation Paper contains remarkably little on specific proposals for amendments to the legislative or regulatory framework but instead puts forward a series of questions for consultation with stakeholders:

• 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 challenges?
• 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?
• What other actions should be taken to ensure the financial sector framework remains modern and technically sound?

The stated objective of the Consultation Paper is to solicit feedback on these questions in order to determine whether the current legislative and regulatory framework meets the federal government’s three core policy objectives:

1. Stability: The sector is safe, sound and resilient in the face of stress
2. Efficiency: The sector provides competitively priced products and services, and passes efficiency gains to customers, accommodates innovation, and effectively contributes to economic growth
3. 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 consultation period runs until November 15, 2016 and written comments should be submitted to:

Financial Institutions Division
Financial Sector Policy Branch
Department of Finance Canada
James Michael Flaherty Building
90 Elgin Street
Ottawa ON K1A 0G5

LegislativeReview-ExamenLegislatif@canada.ca
Telephone: 613-369-9347

Submissions received in response to this Consultation Paper will inform the development of a policy paper to be published in 2017 as the second stage in the consultation process.

The Consultation Paper notes that Finance Canada will continue working on separate tracks on reviewing Canada’s deposit insurance framework, assessing options to amend the housing finance framework, considering a federal oversight of national retail payments systems, and developing a resolution regime for Canada’s financial market infrastructures. In addition, the appendix to the Consultation Paper mentions ongoing work to modernize the consumer protection framework.