Order Fixing April 30, 2020 as the Day on Which Certain Provisions of that Act Come into Force: SI/2020-35

Canada Gazette, Part II, Volume 154, Number 10

Registration

SI/2020-35 May 13, 2020

BUDGET IMPLEMENTATION ACT, 2018, NO. 2

Order Fixing April 30, 2020 as the Day on Which Certain Provisions of that Act Come into Force

P.C. 2020-274 April 24, 2020

Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to subsection 351(1) of the Budget Implementation Act, 2018, No. 2, chapter 27 of the Statutes of Canada, 2018, fixes April 30, 2020 as the day on which sections 331, 332, 337 and 338, subsection 342(2) and sections 344 to 347 and 350 of that Act come into force.

EXPLANATORY NOTE

(This note is not part of the Order.)

Proposal

This Order in Council, pursuant to subsection 351(1) of the Budget Implementation Act, 2018, No. 2, chapter 27 of the Statutes of Canada, 2018, fixes April 30, 2020, as the day on which sections 331, 332, 337 and 338, subsection 342(2) and sections 344 to 347 and 350 of that Act come into force. These provisions amend the Bank Act and the Financial Consumer Agency of Canada Act.

Objective

The purpose of this Order is to bring into force legislative amendments that would strengthen the powers and mandate of the Financial Consumer Agency of Canada (FCAC).

Background

The Government introduced in Budget Implementation Act, 2018, No. 2 legislative amendments to strengthen the FCAC’s enforcement powers and mandate and to continue to advance consumers’ rights and interests when dealing with their banks. These amendments did not come into force upon royal assent to allow the regulator and industry time to prepare for implementation.

These amendments responded to two reports by the FCAC that highlighted key areas where regulatory oversight could be strengthened and bank consumers better protected. The first was an assessment of best practices in provincial and territorial consumer protection regimes in the Report on Best Practices in Financial Consumer Protection. The second was a review of bank sales practices in the Domestic Bank Retail Sales Practices Review.

To address the issues raised in the FCAC reports and better align Canada’s financial consumer protection rules with international standards, legislative amendments were made to the Bank Act and to the Financial Consumer Agency of Canada Act. These legislative amendments are comprised of two components.

The first provides the FCAC with strengthened powers and an improved mandate to implement supervisory best practices. No supporting regulations are required to bring into force these changes to the Financial Consumer Agency Act and the Bank Act.

The second put in place a new financial consumer protection framework for banks. The new framework will help to strengthen bank practices to improve outcomes for consumers, and further empower and protect consumers in their dealings with their banks. These legislative amendments (sections 315 to 330 and 333 to 335 and subsection 336(2) of the Budget Implementation Act, 2018, No. 2) will be brought into force at a later date once the supporting regulations have been developed and industry has made the necessary systems and policy changes.

Implications

This Order fixes April 30, 2020, as the day on which amendments to the Bank Act and the Financial Consumer Agency of Canada Act relating to the FCAC’s new mandate and powers will come into force.

These provisions update the FCAC’s mandate by clarifying that it must strive to protect the rights and interests of consumers of financial products and services and the public, taking into account the need of financial institutions to efficiently manage their business operations.

In addition, they strengthen the powers of the FCAC by providing its Commissioner the ability to direct banks to comply with consumer protection rules, including ordering restitution when charges have been improperly collected, and the power to compel banks to undergo third-party independent audits.

These changes also update the FCAC’s administrative monetary penalties framework under the Financial Consumer Agency of Canada Act by increasing the maximum penalty to $1 million per violation for a person and $10 million per violation for an entity. The Commissioner will also be required to publicly name an entity found to be in violation of a consumer provision, along with the nature of the violation and the amount of the penalty imposed.

Consultation

Banks, provinces, territories and consumer groups were consulted on the new mandate and powers of the FCAC and were broadly supportive. The FCAC is updating its supervisory framework to be ready to exercise its new powers, and has discussed the upcoming changes with industry. Consumer groups were supportive of stronger powers for the FCAC and of a mandate that supports more proactive supervision and enforcement. Stakeholders were also consulted on the April 30, 2020, coming-into-force date and no concerns were raised.

Departmental contact

Erin O’Brien
Director General
Financial Services Division/Financial Sector Policy Branch
Department of Finance Canada
90 Elgin Street
Ottawa, Ontario
K1A 0G5
Telephone: 613‑369‑3830
Email: erin.obrien@canada.ca