Bill C-365 calls for plan for implementation of open banking in Canada
By Kevin Landry
On November 9 2023, Bill C-365, An Act respecting the implementation of a consumer-led banking system for Canadians (“C-365”), short titled as the ‘Consumer-led Banking Act’ was read in the House of Commons.
C-365 follows several other recent developments in the fintech and payments space in Canada, namely the release of the Retail Payment Activities Regulations, and the Retail Payments Activities Act.[1] Importantly, it is a push toward implementation of open banking in Canada, which has been moving slowly forward in past years.
C-365 is not a plan for open banking in Canada; it calls for the implementation of a plan for open banking in Canada within 30 days of coming into force (or ten days after the start of the next session of the House). It would also require the Minister of Finance to table a report setting out reasons for any delay in the implementation of a bill on open banking if not tabled within six months of C-365 coming into force.
Background
In March 2022, the Federal Government named Abraham Tachjian as the open banking lead, and was mandated to develop a ‘made in Canada’ regime based on the recommendations in the final report of the Advisory Committee on Open Banking. Although progress on implementation is ongoing, no implementation plan has been released to date.
Open banking is currently in use in Australia and the United Kingdom. There have been several phases to this discussion in Canada, and more information on past activity and future steps is available online.
What is open banking?
Currently in Canada most fintech apps operate via ‘screen scraping’- a user provides their banking log-in information to a third-party application who enters the users online banking, takes applicable data and uses it for purposes of the app. This poses obvious security risks and can give fintech companies access to passwords, transaction information and other sensitive data. Sharing passwords in this fashion can also leave consumers in breach of bank terms of service and at fault for fraudulent activities of nefarious fintech actors.
Open banking is a system that allows ownership of financial data by the user in some form. It would allow banks to securely share users’ financial data with an app on the user’s behalf using a secured online channel. It would no longer be necessary to provide banking passwords and credentials to access fintech products and services.
This update is intended for general information only. If you have questions about the above, please contact the author(s) to discuss your needs for specific legal advice relating to the particular circumstances of your situation.
Click here to subscribe to Stewart McKelvey Thought Leadership.
[1] Stewart McKelvey had previously written about these here, here and here
Archive
Significant changes may be coming to the standard automobile policy in PEI, including increases to the accident benefits available under Section B and an increase to the so-called “cap” applicable to claims for minor personal…
Read MoreOn June 17, 2013, pursuant to the recently amended Section 70 of the Labour Relations Act for Newfoundland and Labrador (“NL”), the Government of Newfoundland and Labrador issued three Special Project Orders (“SPOs”) in respect of the…
Read MoreOn June 14, 2013, the Supreme Court of Canada (“the Court”) released the decision that employers across the country were waiting for. In CEP Local 30 v. Irving Pulp & Paper Ltd., 2013 SCC 34, a…
Read MoreThe Government of Newfoundland and Labrador (“NL”) has recently released its “Aboriginal Consultation Policy on Land and Resource Development Decisions” (the “Policy”). A copy of the Policy can be accessed here. This new Policy is the…
Read MoreThe following is a province-by-province update of legislation from a busy 2013 spring session in Atlantic Canada. Watching these developments, we know the new legislation that has passed or could soon pass, will impact our…
Read MoreThe integrity of the jury system has become a pressing topic for our courts of late, with articles about jury duty frequently appearing front and centre in the press. The recent message from the Nova…
Read MoreIN THIS ISSUE: Cloud computing: House to navigate risky skies by Daniela Bassan and Michelle Chai Growing a startup by Clarence Bennett, Twila Reid and Nicholas Russon Knowing the lay of the land – Aboriginal rights and land claims in Labrador by Colm St. Roch Seviour and Steve Scruton Download…
Read MoreDOES IT APPLY TO YOU? On June 1, 2013, the Personal Health Information Act (PHIA) comes into force in Nova Scotia. If you are involved in health care in Nova Scotia, you need to know whether PHIA…
Read MoreEDITOR’S COMMENT This edition of Atlantic Employers’ Counsel focuses on key areas of employment standards in Atlantic Canada. Employment standards legislation outlines the rights and obligations of employees and requirements that apply to employers in…
Read MoreNEW TORT OF CYBERBULLYING On May 10, 2013 the Nova Scotia legislature passed the Cyber-safety Act (Bill 61). When this bill comes into force, it will give rise to a new tort of cyberbullying that…
Read More