Ottawa plans to introduce bill for open banking, department says
Open banking — or consumer-driven banking, as Ottawa calls it — is about allowing Canadians and businesses to securely share their financial data with third parties other than their banks.
Open banking could let Canadians with multiple accounts across different banks see their entire financial picture on one convenient dashboard. It also could help renters build their credit scores just by paying their rent on time every month.
Other nations have implemented open banking systems and the federal Liberals passed initial legislation last year to break ground on open banking in Canada.
But getting to that point — and keeping up the pressure to get the second half of that legislation tabled — has been 'a slog,' said Fintechs Canada executive director Alex Vronces.
Story continues below advertisement
'I don't think the government at first understood really what consumer-driven banking was,' he said.
After years of study, Ottawa got the ball rolling on open banking through the legislation to implement the 2024 federal budget roughly a year ago.
That bill gave the Financial Consumer Agency of Canada a mandate to head up the country's open banking framework. Legislation is still required to implement a plan to accredit service providers and set the common rules that financial institutions will have to follow.
2:17
Business Matters: Federal budget 2024 brings changes to banking fees
The Liberal government said in the 2024 fall economic statement that it's looking at early 2026 for implementation of open banking.
But Canada has gone through a federal election since those plans were made — and while the Liberals were returned to power with another minority government, references to consumer-driven banking were absent from the party's election platform.
Story continues below advertisement
And the government of Prime Minister Mark Carney did not table a spring budget, which it normally would use to outline its legislative priorities.
Get daily National news
Get the day's top news, political, economic, and current affairs headlines, delivered to your inbox once a day. Sign up for daily National newsletter Sign Up
By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy
Natacha Boudrias, leader of the National Bank of Canada's open banking strategy, said the industry lacks 'clarity' on the future shape of consumer-driven banking. She said the spring election likely stalled movement on the file.
'We're certainly hoping that the government is going to kick-start the effort sooner rather than later so that we don't get stuck in a loop of consultation,' she said.
A Finance Canada official said in a media statement that the government is still committed to consumer-driven banking.
'The remaining elements of the consumer-driven banking framework will be introduced at the earliest opportunity, to ensure that Canadian consumers and business can securely benefit from tools that help them reduce costs and improve their financial outcomes,' the statement says.
Instead of waiting on Ottawa, the National Bank has moved forward on its own open-banking framework that lets fintechs — financial technology firms that develop apps for Canadians and businesses — essentially plug into their databases to share information securely when users give their permission.
The status quo for financial data sharing is 'screen scraping,' a process that usually sees an individual share banking credentials with a third party to access the information an app needs to run.
Story continues below advertisement
But Boudrias said there's no control over how much or how little data is shared through screen scraping — it's all or nothing, making it a potential privacy nightmare.
Open banking ideally takes that firehose of data and narrows it, giving users control over the information a fintech sees and how long it can access it.
2:57
Business News: Bank of Canada holds key interest rate & Canada's unemployment rate hits 7%
'It's about putting the rails of trust in place,' Boudrias said.
Financial Consumer Agency of Canada commissioner Shereen Benzvy Miller addressed the risks of screen scraping in notes for her keynote address at the Open Banking Expo in Toronto on Tuesday.
Benzvy Miller said Canadians are already sharing data widely with fintechs but they may not know much about the privacy risks involved. She said part of the agency's task will be to drive consumer awareness of open banking to build trust.
Story continues below advertisement
'We envision a future — not far off — where consumers can securely share their financial data with trusted providers at the tap of a button,' she said in a copy of the speech shared with The Canadian Press.
The Financial Consumer Agency of Canada will be in charge of building and vetting a public registry of fintechs that Canadians and financial service providers can trust to handle data securely. These fintechs will be granted a handy visual logo to mark their accreditation.
Benzvy Miller said the agency is also working with Finance Canada on setting out common rules for the system and the agency is looking forward to seeing legislative amendments from the finance minister.
But if that final legislation isn't tabled soon, Vronces said, the agency will be stuck in 'regulatory purgatory.'
'They'll have a mandate but they won't be able to do anything with it,' he said.
Getting to this point has been a long haul for Vronces, who has been lobbying on behalf of Canadian fintechs for roughly seven years.
He said he has reasons to believe Carney will be a champion of consumer-driven banking. Carney was governor of the Bank of England when the United Kingdom introduced such a system in 2017.
The opportunity to implement open banking comes as a pivotal time, Vronces said, as Carney looks to overhaul the Canadian economy and improve productivity in the face of global trade upheaval.
Story continues below advertisement
Open banking could light a fire under Canada's financial sector, he said, because big banks would be forced to diversify their services and compete with the wider fintech industry.
Vronces said early conversations with the federal government give him hope that the second half of the legislation will be tabled soon, possibly alongside the federal budget in the fall.
He compared the open banking file to a magazine that's already had the articles written and the layout set, with just a few finishing touches remaining.
'It's really not a lot of work for the government to complete its promise,' he said. 'It just needs to hit print.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Global News
33 minutes ago
- Global News
Ontario tops infrastructure funding pot with $1.6B more for towns and cities
The Ford government is topping up a pot of money designed to help towns and cities boost lagging housing numbers by building more roads and sewers. A new commitment of $1.6 billion was announced by Premier Doug Ford and Infrastructure Minister Kinga Surma in Ottawa on Monday at the opening of an annual municipal conference. 'Working with our municipal partners, we're going to keep lowering costs, investing in infrastructure and cutting red tape so we can keep the dream of homeownership alive in Ontario,' Ford said in a statement. Get daily National news Get the day's top news, political, economic, and current affairs headlines, delivered to your inbox once a day. Sign up for daily National newsletter Sign Up By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy The new money will go toward the Municipal Housing Infrastructure Program, which has already had $2.3 billion announced for it, taking the total to almost $4 billion. The fund is split into four streams, allowing municipalities to apply for money for agriculture and irrigation, two types of water systems and 'core servicing' like roads or bridges. Story continues below advertisement 'Investments in municipal infrastructure have consistently proven to be the best way to protect local, provincial and national economies,' Robin Jones, president of the Association of Municipalities of Ontario, said in a statement distributed by the Ford government. 'These investments will not just help to build homes, they will provide thousands of jobs in communities across the province and lay the foundation for long-term productivity. We commend Premier Ford for these important investments.' The announcement comes with Ontario well off pace in its attempts to build 1.5 million homes by 2031. The latest data from the government shows that, even after adding long-term care beds and student dorms to its statistics, Ontario fell tens of thousands of new homes short of its target last year.
33 minutes ago
Who controls the food supply? Proposed changes to seed reuse reopens debate
It's a small change that risks cultivating a big debate. On one side is the principle of farmer's privilege — the traditional right of Canadian farmers to save seeds at the end of a growing season and reuse them the next year. On the other is the principle of plant breeders' rights — the right of those who develop new seeds and plants to protect and profit from their discoveries. The issue has been dormant for a decade. Now, proposed changes to government rules regarding plant breeders' rights are reviving that debate. It also raises questions about how Canada gets its food and who controls what is grown. Ultimately, it's about food security, said Keith Currie, president of the Canadian Federation of Agriculture. The group supports the changes, which include narrowing the scope of farmer's privilege. Not only keeping us competitive to keep food costs down, but also to make sure that we maintain new varieties coming forward for that food availability. Enlarge image (new window) The proposed changes could reduce the right of farmers to save and reuse seeds for crops like fruits and vegetables. Photo: The Canadian Press / Giordano Ciampini In a notice (new window) dated Aug. 9, the government announced proposed changes to Canada's Plant Breeders' Rights Regulations — a form of intellectual property protection for plants, similar to a patent. The regulations give plant breeders a monopoly over the distribution of their product for a set period, as a way to to encourage investment and innovations such as varieties with higher yields or more resistant to drought or pests. It's a big business. Estimates of the economic impact of the seed industry in Canada range from $4 billion to $6 billion a year. The right to reuse The changes would remove the right of farmers to save and reuse seeds and cuttings from protected fruits, vegetables, ornamental varieties, other plants reproduced through vegetative propagation and hybrids. For most plants recognized under the law, the protections last for 20 years. Personal gardens and many other kinds of crops such as wheat, cereals and pulses, where seed saving is more widespread, would not be affected. Among the other proposed changes is to extend the protection for new varieties of mushrooms, asparagus and woody plants like raspberries and blueberries to 25 years from the current 20 years. A public consultation on the changes runs until Oct. 18. Enlarge image (new window) NDP agriculture critic Gord Johns is calling for parliamentary hearings into the proposed changes. Photo: Kendal Hanson/CHEK News NDP agriculture critic Gord Johns says the changes raise an important issue for Canadians. He questions why the government is holding the consultation in summer when most farmers are focused on growing and harvesting crops — not drafting submissions for public consultations. They keep doing this over and over again, said Johns of the federal government. They announce regulatory changes that impact farmers and their livelihoods [and] they schedule the consultation period during the busiest time of the year for farmers. Johns said companies producing new kinds of seed should be adequately compensated for their innovation and intellectual property. But he said farmers who grow and harvest the food Canadians eat shouldn't be starved by big corporations choking off their seed supply. He wants the House of Commons agriculture committee to hold hearings and take a closer look at the changes being proposed. A spokesperson for Minister of Agriculture and Agri-Food Heath MacDonald said the government is committed to encouraging innovation, investment, research and competitiveness in Canadian agriculture, horticulture and ornamental industries. The spokesperson said the government will review all feedback before determining next steps. Access vs. innovation Former prime minister Stephen Harper's government triggered a debate in 2015 when it adopted measures to bring Canada's rules more in line with guidelines adopted by the International Union for the Protection of New Varieties of Plants, known as UPOV 91. The rules are separate from patent law or technology use agreements which some seed companies use to prevent farmers from saving and reusing seeds. Changes to plant breeders' rules are now again on the table. Last year, a government consultation resulted in 109 submissions, the majority supportive of change. Meanwhile, lobbyists have been busy behind the scenes. According to the federal lobbying registry, 13 people from several different groups or companies are currently registered to lobby on plant breeders' rights including the Canadian Federation of Agriculture, the Canadian Canola Growers Association, the Fruit and Vegetable Growers Association and Swiss-based Syngenta, owned by Sinochem, a Chinese state-owned enterprise. Enlarge image (new window) Wheat is not included in the proposed changes, but a research director for the National Farmers Union worries they could be the start of a 'slippery slope.' Photo: Reuters / Todd Korol Cathy Holtslander, director of research and policy for the National Farmers Union, says the proposed changes risk hurting farmers while increasing profits and the power of seed-producing companies — often multinationals with foreign ownership. While the changes are focused on an area of agriculture where seed saving is less common, Holtslander warns the changes are a slippery slope that could lead to an erosion of the rights of farmers. If they were to go after wheat with the amendment, there would be a huge uproar and people would really be angry and push back, Holtslander said. She said what's being proposed paves the way for other crops to be included later. The seed industry does not want farmers' privilege to exist for any seed. They want to be able to require people to buy new seed every year, she said. Holtslander's group plans to fight the proposed changes. She said the issue goes beyond the question of individual farmers reusing seed. If the big multinational companies control the seed, they control our food supply, she said. Lauren Comin, director of policy for Seeds Canada, acknowledges the issue can be controversial but argues Canada needs strong intellectual property protection if it wants access to the newest innovations to compete on the world stage. It's incredibly important to have these frameworks to encourage investment companies, businesses, public entities, to know that they are going to somehow be compensated and protected, Comin said. She said that while the changes provide that certainty and that incentive for investment, she wants them to go further. While acknowledging there isn't enough certified seed for all of Canada's cereals and small grains crop, Comin would also like to see farmers compensate plant breeders when they reuse seeds, as they do in Europe. The farmer's privilege does not say that that use is free, she said. [Farmers] can choose to buy the latest and greatest product of innovation, which means that there is a tremendous amount of investment and effort that went toward developing this improved variety. Or they can decide that they don't value innovation, and they can go back to a variety that's unprotected and grow that. Currie, an Ontario grains and oil seed farmer who saves and reuses seeds, says Canada needs to balance the two principles. He says farmer's privilege is key to Canada's competitiveness, but so is access to new varieties of seeds and plants. While I do understand where some of the multinationals want to have better control, I believe in order for the industry to be viable, farmers have to have some control as well, he said.
Edmonton Journal
33 minutes ago
- Edmonton Journal
Opinion: Ordering Air Canada workers back to work erodes the middle class
Article content Why should Canadians care about any of this? Put simply, they should care because the middle class is not a naturally occurring phenomenon. It depends on rules and legal frameworks that give workers bargaining power. And the key to working bargaining power is the right to strike. Without it, corporations and the rich will gobble up ever larger pieces of the economic pie and workers will only be left with crumbs. Article content Defending worker bargaining power is particularly urgent in the context of the current affordability crisis. No political party or government can legitimately say that they're on the side of working people if they don't have a plan to maintain or expand worker bargaining power. If they're doing the reverse — as is the case with Section 107 — then they're part of the problem, not the solution. Article content The fear among Canadian unions and workers is that if the Liberals get away with watering down the right to strike at the federal level (which has legislative responsibility for about 10 per cent of Canadian workplaces) it will only be a matter of time before provincial governments draft their own versions of Section 107 for provincially regulated workplaces. Article content Article content Workers and unions see this as an existential threat to the post-Second World War 'Great Compromise' which saw workers agree to swear off wildcat strikes in exchange for a regulated system of labour relations that promised fair outcomes for both workers and employers. This compromise was instrumental in building the broadly shared prosperity that helped create the Canadian middle class. Article content This is why Air Canada workers are defying the back-to-work order — and why others are promising to follow suit. If the system created by the Great Compromise no longer can be counted on to deliver fair outcomes for workers, why should workers respect it? Article content Federal Jobs Minister Patty Hadju says she's using Section 107 to secure 'labour peace.' The irony is that the continued use of this section in ways it was never intended is bringing about the opposite: the potential collapse of the Great Compromise. As workers from that era famously chanted from their wildcat picket lines: 'No justice, no peace.' Article content Article content If Prime Minister Carney really wants labour peace — and if he doesn't want to go down in history as the prime minister who weakened worker bargaining power at the worst possible time — then he needs to rescind the back-to-work order for Air Canada flight attendants and repeal Section 107. Article content Now is the time to remember and reinforce the Great Compromise, not abandon it. As the old saying goes: those who forget history are doomed to repeat it. For the sake of the Canadian middle class, let's try to avoid that mistake. Article content
