With a federal election on the horizon and Canada-U.S. tensions increasing economy uncertainty, Fintechs Canada unveiled a set of recommendations aimed at modernizing Canada’s financial sector to put more power in the hands of consumers and small businesses.
In its pre-budget submission to the federal government, the association representing Canada’s most innovative financial technology companies laid out four key proposals that would increase competition, reduce costs, and drive economic growth.
“Canada has fallen behind other G7 nations in financial innovation and competition, and Canadian consumers are paying the price through higher fees, limited financing options, and reduced productivity,” said Alex Vronces, Executive Director of Fintechs Canada. “Now is the time for bold action to modernize our financial system so that consumers and businesses can have the tools they need to weather the economic storm.”
The recommendations focus on completing long-delayed initiatives and establishing new mandates for regulators:
- Fintechs Canada urges the government to prioritize the rapid implementation of Canada’s consumer-driven banking framework (“open banking”) by 2026, simplifying consent requirements and ensuring broad coverage of financial data. This would enable Canadians to better compare financial products and access more affordable services.
- The association calls for urgent completion of the real-time payment system, noting Canada is now the only G7 country without such infrastructure. The submission recommends issuing an ultimatum to major banks: launch the real-time rail by 2026 or face the prospect of the Bank of Canada developing its own system, similar to the U.S. Federal Reserve’s approach with FedNow
- The submission advocates for establishing competition mandates for financial sector regulators including OSFI, FCAC, and the Bank of Canada, following successful models in the UK and Australia.
- Fintechs Canada recommends a multi-year project to modernize outdated regulations that create unnecessary barriers to entry and compliance burdens for innovative companies. This review should be sufficiently broad to capture all the innovation happening in the financial sector today.
“With the big five banks controlling over 90% of the market, Canadians face higher fees and fewer options than consumers in comparable countries,” added Vronces. “As parties develop their election platforms, we urge all political leaders to prioritize financial innovation and competition as essential components of affordability and economic growth.”
The recommendations come at a critical time, as Canadians continue to face financial pressures and seek new sources of economic growth in light of Canada-U.S. tensions.
The full pre-budget submission can be accessed here.
