Canada’s Open Banking ecosystem reacts to Budget 2024

Canada’s Open Banking ecosystem has welcomed the “tangible steps” and the “commitment to advance” a Consumer-Driven Banking Framework, as set out in Budget 2024 yesterday (April 16).

The government revealed its intention to introduce legislation that establishes the “foundational elements” of an Open Banking Framework this Spring, with the remaining elements of the framework to be legislated in Fall 2024.

“We are greatly encouraged by the Government of Canada’s commitment to advance Open Finance in Canada,” said Steve Boms, executive director at FDATA North America.

“The inclusion of consumer-driven banking in Budget 2024 marks a significant step for the financial empowerment of consumers and small and medium-sized enterprises.”

He added that, once implemented, Open Banking will “foster a more innovative Canadian financial services marketplace”, and promote a fairer and more inclusive financial services ecosystem, in line with the regimes “established by nearly every other G7 nation”.

Boms told Open Banking Expo: “The Canadian government clearly articulates in the budget its intention to build an Open Finance system that is interoperable with the regime that the US CFPB [Consumer Financial Protection Bureau] will create through rulemaking later this year.”

The Federal Budget revealed that legislation will expand the Financial Consumer Agency of Canada’s (FCAC’s) mandate to include oversight, administration and enforcement of consumer-driven banking.

In a post on LinkedIn, Open Finance Network Canada (OFNC) stated that Budget 2024 highlights the benefits of consumer-driven banking for the Canadian economy and “shows commitment” through “dedicated governance”, as well as “financial allocation”, with $1 million for the FCAC and $4.1 million for the Department of Finance.

Last year, the Council of Canadian Innovators (CCI) joined OFNC, Fintechs Canada and the Conservatives in calling for Minister of Finance Chrystia Freeland to “reaffirm her government’s promise to enact Open Banking”.

It coincided with the launch of a campaign by the CCI called ‘Canadians for Open Banking’, which Nick Schiavo, CCI director of federal affairs said at the time is about “increasing consumer control, security and choice in Canada’s financial services sector”.

In response to the Budget 2024, Schiavo said: “Taking tangible steps forward on Open Banking is welcome news. Canada has incredible financial innovators, and with the appropriate regulatory framework in place, the sky’s the limit for improved financial services for citizens.

“The devil is in the details, but in today’s announcement we see a government tangibly moving forward with Open Banking, and that’s good news.”

Canada’s Real-Time Rail

Alex Vronces, executive director of Fintechs Canada, also issued a statement in response to Budget 2024.

“This government is aware of the high fees banks charge Canadians to open accounts, pay bills, and manage investments, which is why this year’s federal budget will make it easier for Canadians to shop around and find a better deal,” he said.

“Affordability and productivity depend, in part, on the competitiveness of our banking sector, and so we look forward to the legislation that’s going to be tabled this spring to deliver consumer-driven banking in 2025.”

Fintechs Canada noted, on LinkedIn, that along with Payments Canada’s announcement about the Real-Time Rail, the commitments in Budget 2024 will “make banks work harder for Canadians”.

Payments Canada announced yesterday (April 16) that the final part of the build of its instant payment system has resumed, with new partners IBM Canada and CGI, and existing partner Interac, having been on hold since last year.

Jude Pinto, interim co-chief executive officer of Payments Canada, revealed the timeline for building and testing the clearing and settlement component.