Why big banks and pension giants are likely breathing easier after the Liberal budget
Businesses and wealthy Canadians will be paying higher taxes but Canada’s largest banks and pension managers were most likely breathing a sigh of relief when they read Finance Minister Chrystia Freeland’s latest federal budget, which lays out next steps for competitive “open” banking and persuading pensions to invest more of their billions at home.
The biggest comfort for the banks is perhaps the appointment of the Financial Consumer Agency of Canada to oversee open banking, which will see them compete with financial technology (fintech) companies for customers on a range of products and services. The big banks are familiar with the FCAC through its role of promoting financial literacy and ensuring federally regulated institutions follow consumer-protection rules.
There had been discussions about creating an entirely new government agency to oversee competitive open banking, as happened in the United Kingdom, but the Canadian Bankers’ Association had been urging the federal government to use existing regulators to avoid duplicative or conflicting obligations.
The bankers appear to have been successful in this regard. Along with selecting the FCAC in Tuesday’s budget to “oversee, administer, and enforce” Canada’s open banking framework, Ottawa earmarked $1 million for the consumer agency to prepare for its new responsibilities and develop a consumer awareness campaign.
“The Canadian banks have a pretty decent working relationship with a lot of their regulators,” said Geoff Rush, national industry leader for financial services at KPMG. “This is just putting some additional responsibilities with an existing regulator, so I don’t think you’re going to see any pushback or arguments.”
Rush said the selection of the FCAC should
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