44th Parl. 1st Sess.
February 29, 2024 10:00AM
Mr. Speaker, I am pleased to have the opportunity today to participate in the debate on Bill C-365, an act respecting the implementation of a consumer-led banking system for Canadians. This is a private member's bill.
Bill C-365 would require the Minister of Finance to table in each House of Parliament, within 30 days of the bill's passage, a plan to implement an open banking system in Canada and a bill to implement an open banking system in Canada within six months. I could stop there, because that is a plan that would see the government move more slowly on open banking than it already is. The Minister of Finance has already announced that budget 2024 will include legislation for the implementation of consumer-driven banking.
Instead, I will take a moment to underline the importance of this file and why we should reject a private member's bill that would impose a lax deadline and no details on the implementation of a consumer-driven banking regime. Consumer-driven banking, also known as open banking or consumer-driven finance, refers to systems that allow people and businesses to securely transfer their financial data to different financial services providers, such as apps that use data to provide automated budgeting and savings advice. Individuals can access services that allow them to build their credit by proving they have paid rent on time, for example.
It is expected that consumer-driven banking would empower Canadians to securely access and share their financial data, ensure that Canadians are not subject to fees when accessing and sharing their data, protect Canadians and the financial system from risky practices like screen scraping, ensure that parties at fault are liable for any damages or data breaches, and allow Canadians to safely access innovative products and services that can help them improve their financial outcomes.
The issue now is that without consumer-driven banking, Canadians, by default, currently share their banking credentials with entities other than their bank in order to access data-driven financial services, while there are no rules around the practice. This can be worrisome for many Canadians. Personally, it makes me feel uneasy. Like many other Canadians, I am concerned that the non-secure, unregulated practice called screen scraping leaves us open to security, privacy and liability risks in the event of data breaches or losses. That is why giving Canadians control over their own financial data is so important.
That is exactly what our government wants to do. Indeed, we support the implementation of consumer-driven banking. We have already made a lot of progress in this direction. However, such a system needs to be defined by clear rules to protect consumers.
Last fall, the Minister of Finance indicated in the 2023 fall economic statement that the government intends to introduce framework legislation for implementing consumer-driven banking in the 2024 budget. This framework legislation will propose a phased-in approach to scope, oversight of the technical standard, and a timeline for phasing out screen scraping.
In line with international best practices, the aim of our legislation will be to codify key elements including scope, common rules for addressing liability, privacy, security, accreditation and management of technical standards; mandate a government-led governance entity responsible for monitoring and supervising the system, enforcing common rules, accrediting and updating mandated technical standards; and address liability among industry participants.
Our work will be framed by three major policy objectives. First, we are aiming to ensure the continued safety and soundness of the financial sector by addressing the security risks arising from existing data sharing practices such as screen scraping, and by establishing oversight of financial data sharing activities. Second, we want to ensure that Canadians can securely and confidently access and use their financial data to improve their financial outcomes. Third, we want to establish a cohesive framework with a clear, fair and transparent approach to accreditation, to support the continued security and stability of the Canadian financial sector, including existing financial institutions.
It is important for our government to ensure Canadians benefit from effective oversight of financial data sharing. That is why our framework will mandate a government-led entity to supervise and enforce the framework.
To facilitate oversight of provincial entities while respecting their jurisdiction, a model that permits provincial entities to opt in to governance, supervision and participation will be developed.
Naturally, governance design is key to ensuring the framework achieves the public policy objectives, which in this case are safety, stability, innovation and utility for all Canadians.
With a strong governance framework, we will be able to ensure participants abide by common rules by outlining clear roles and responsibilities for participants and government, and what actions will be taken when non-compliance occurs.
I am glad to see that, after significant consultation and review, there is now broad alignment among stakeholders with the government's proposed approach. The day after the fall economic statement, the Canadian Bankers Association was quoted as saying that it welcomes “the clarity provided in the Fall Economic Statement” and that it will “continue to work collaboratively with the government on implementing a consumer-driven banking regime in Canada.”
Furthermore, Canadian fintechs were also reported to be supportive of the government's plan, as outlined in the fall economic statement and policy statement. The framework proposed by our government aligns with those of our largest trading partners, including the United States.
As members can see, consumer-driven banking is something that we support and are acting on. This framework is necessary to establish a system that enables secure financial data sharing. The Minister of Finance has already announced that budget 2024 will include legislation for the implementation of consumer-driven banking.
In order to do that, we continue to work closely with industry, federal regulators, provincial and territorial governments and other stakeholders.
It is clear that, with all the progress we are making on creating a consumer-driven banking system, Bill C-365 is not necessary. It will be obsolete before it is even voted on.
That is why I will vote against Bill C-365, and I invite my hon. colleagues to do the same.
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- Feb/29/24 6:14:58 p.m.
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I recognize the hon. member for Bay of Quinte for his right of reply.
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- Feb/29/24 6:15:14 p.m.
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Mr. Speaker, it has been a pleasure to hear the debate and to present my first private member's bill when it comes to open banking here in Canada.
This bill was to do two thing. It was to ensure that we provide the opportunity for businesses to participate in Canadian banking, in fintechs, and it was also to ensure the government did what it promised.
Before I start that, I just want to make a quick comment. The Right Honourable Prime Minister Mulroney has passed away, and to his family, to Caroline, to Ben and others, I give our sincere condolences. A favourite quote of mine from Brian Mulroney was, “Canada must strive to be a beacon of hope, a model of prosperity, and a nation that works for all its citizens. ” Rest in peace, to Brian Mulroney.
I am encouraged by the speeches tonight by the members for Hamilton Centre and Jonquière, who talk about the need for open banking. We brought this bill forward because it has taken six years to get legislation promised to Canadian fintechs and to Canadians themselves to get competition in Canada. Canada has a monopoly problem. We have a major problem, where we have major regulations that ensure we have oligopolies and monopolies in the grocery sector, and we are paying some of the highest prices in the world in the airlines, in telecommunications and in banking.
The solution to banking is open, or consumer-led, banking. This bill would do two things. It would ensure there is legislation presented within six months, and it would make the government table a report that has been on the minister's desk since May 2023. For six years, we have been waiting.
Canadians and fintechs are saying one thing, and one thing very clearly, to me; they cannot wait anymore. They do not believe the Liberal government will present this legislation in the March budget, even though it has been in the fall economic statement. They do not believe that it may even be in the next fall economic statement. By passing this bill, parliamentarians can ensure that open banking comes before discussion in the House of Commons and also in the other House. In doing so, we would help the fintechs that are desperately asking us to ensure we get open banking implemented in Canada.
Those fintechs are providing good wages at a time when start-ups in Canada are low, and we need more businesses with more powerful paycheques. More importantly, Canadians need better options for banking. I heard my colleague, earlier, talk about different options for all types of Canadians for banking. There is a company called Borrowell that actually has a fintech app, through open banking, which actually builds credit scores by tracking one's payment of rent. That is a great example of what a fintech business and what open banking would do for all Canadians.
More importantly, this bill would ensure that we could fix the problem in banking. One-third of Canadians are upset with their banking institution, 70% of Canadians have had the same bank account for 11 years, and 80% of Canadians have never switched bank accounts. We have a major oligopoly problem in Canada, with five Canadian banks now controlling 90% of mortgages and with HSBC being bought by RBC.
This bill would create competition, and when there is competition in Canada, that gives benefits through freedom of choice to Canadians and that gives them savings. In the U.K., with the bank accounts for people living in the U.K., they pay zero dollars for transactional fees, zero dollars for overdraft fees and zero dollars for monthly fees. Canadians would save $400 a year if this is implemented.
I am happy to see the discussion. I am hoping to see that we get the vote through Parliament so that we can talk about open banking in this place and in the Senate. We can help fintechs, but more importantly, help Canadians. Let us bring open banking and consumer-led banking, and let us bring it home.
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- Feb/29/24 6:19:32 p.m.
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The question is on the motion.
If a member participating in person wishes that the motion be carried or carried on division, or if a member of a recognized party participating in person wishes to request a recorded division, I would invite them to rise and indicate it to the Chair.
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- Feb/29/24 6:20:07 p.m.
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Mr. Speaker, we request a recorded division.
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- Feb/29/24 6:20:12 p.m.
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Pursuant to Standing Order 93, the division stands deferred until Wednesday, March 20, at the expiry of the time provided for Oral Questions.
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Mr. Speaker, it is obviously with great regret that this House has learned of the passing of Canada's 18th prime minister, the Right Honourable Martin Brian Mulroney.
Obviously, all members join us in wishing the Mulroney family our deepest sympathy at this time as they deal with the loss of this great statesman, who has done so much for our country. I join all Canadians in offering our condolences. Out of respect, I would like to seek unanimous consent for the following motion. I move:
That, notwithstanding any standing order, special order or usual practice of the House:
(a) the motion respecting Senate amendments to Bill C-35, An Act respecting early learning and child care in Canada, be deemed adopted; and
(b) this House do now adjourn.
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- Feb/29/24 6:21:30 p.m.
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All those opposed to the hon. member's moving the motion will please say nay.
It is agreed.
The House has heard the terms of the motion. All those opposed to the motion will please say nay.
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- Feb/29/24 6:22:25 p.m.
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My condolences to the family of the Right Honourable Brian Mulroney.
It being 6:23 p.m., the House stands adjourned until tomorrow at 10 a.m., pursuant to Standing Order 24(1).
(The House adjourned at 6:23 p.m.)
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