Freiberg and Peck

Freiberg and Peck, Feds Reveal Plans for Financial Institution Statutes

The federal statutes that govern banks, insurance companies, trust and loan companies and cooperative credit associations contain sunset provisions that require Parliament to revisit the legislation every five years. This allows financial institutions, supervisory authorities and government to consider developments in the sector and whether the policy framework is appropriate for the times. The legislation may be kept current in aid of the sector’s competitiveness and the consumer’s interest. The previous revision of the legislation (in October 2001) reflected a lengthy and wide-ranging public consultation; such significant policy reviews occur less frequently than every five years.

In anticipation of the sunset, government officials carried out a public consultation in 2005 [discussed in BRG e-COMMUNIQUÉ, vol. 9, no. 4, April 2005].

After the hiatus of a federal election and change of government, the Finance Minister released the government’s white paper of policy proposals on June 14, 2006. As well, the government has amended the financial institution statutes to change the sunset date to April 24, 2007. With an existing statutory right to order an additional six months, the government has given itself until October 2007 to amend the legislation.

The policy proposals are modest. The white paper says that submissions received in the consultation suggested refinement of the legislation but that the legislation did not need major change. Among the reform proposals and planned technical amendments, one proposal stands out. While foreign banks have “considerable flexibility to do business in Canada,” the government recognizes that the entry requirements for “near banks” are burdensome. The government plans to simplify the foreign bank entry regime by limiting its application to “real” foreign banks. Details of how this will be implemented are not discussed.

For further information about the white paper 2006 Financial Institutions Legislation Review: Proposals for an Effective and Efficient Financial Services Framework, please contact Terry Hall at 416 860 2992.

• March 2008 [2]

• General [2] 

• Freiberg and Peck, Feds Reveal Plans for Financial Institution Statutes
• Freiberg and Peck, Feds Reveal Plans for Financial Institution Statutes