Canadian government commits to ‘consumer-driven banking’ in Fall Statement

Ellie Duncan
22 Nov 2023

Canada’s Deputy Prime Minister and Finance Minister Chrystia Freeland has outlined her intention to deliver Open Banking, referred to as “consumer-driven banking”, in the Fall Economic Statement (FES), following mounting pressure from industry groups and the opposition party.

In the 2023 FES, the Canadian government promised to “develop and implement a legislative framework for consumer-driven banking that will enable consumers to securely and confidently access their financial data and, in turn, safely use services that can help them improve their financial outcomes”.

The framework legislation will be introduced in Budget 2024, with the government set to adopt a phased approach to what it called “the three elements” of scope, including participants, breadth of data sharing and functionality.

In next year’s Budget, the Department of Finance will also set out how it intends to oversee the technical standard, and a timeline for phasing-out screen scraping.

The FES also confirmed that the Canadian government will mandate the use of a single technical standard, after consultation with stakeholders and a review of “international best practices” revealed a “clear preference” for a single standard.

It also revealed that Canada will mandate a “government-led entity” tasked with supervising and enforcing the framework, much like the UK’s Open Banking Implementation Entity was.

The FES also provided clarity on accreditation, with a formal accreditation framework set to be a “central part” of the country’s Open Banking framework.

This will ensure that “only trusted entities” can access financial data when requested by a consumer.

However, federally-regulated banks and credit unions, as well as provincially-regulated credit unions, will be exempt from accreditation under the Department of Finance’s plans.

In the section of the FES titled “Next steps”, it states: “The Department of Finance will advance the work required to stand up a Canadian framework governing consumer-driven banking, with the goal of adopting legislation and fully implementing the necessary governance framework by 2025.”

Minister Freeland said: “Our economic plan is about building a strong economy that works for everyone, and this Fall Economic Statement is the next phase of our plan.

“With a focus on supporting the middle class and building more homes, faster, we are taking action on the priorities that matter most to Canadians today—and we will continue doing everything we can to deliver for Canadians from coast to coast to coast.”

In a post on LinkedIn, Independent Senator Colin Deacon, who has long been an advocate for Open Banking, wrote: “The Minister’s commitment to implement Consumer-driven Banking will mobilize the important work led by Canada’s Open Banking Lead, Abraham Tachjian, the tireless and exceptional work of Finance Canada officials, the dedication and effort of countless organizations and individuals who participated in the thorough several consultation processes, and the multitude of advocates and thought leaders who have helped to make this issue a political priority.”

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

It came after the OFNC wrote an open letter to the Finance Minister in which it said that the Canadian government should “enable” the Open Banking Lead’s report and recommendations as the “definitive first step” of an Open Banking framework.

The board of the OFNC wrote: “We risk falling behind, even though we have invested considerable time, effort and money into Open Banking, dating back to the formation of the Advisory Committee in 2018.”