One of the proposals announced in the federal budget last week was the introduction of measures to help ensure Canadians have access to safe, reliable and lower-cost remittance services. Recognizing that international remittances are critical to many Canadians who provide financial support to their families abroad, the proposed measures included establishing a remittance price comparison website that will increase fee transparency. While no specific regulation was proposed, the government stated its intention to work with financial institutions to evaluate possible opportunities to expand access to lower-cost remittance services.
The budget announcement followed the recent introduction of three private members’ bills dealing with the regulation of money remittances:
- On April 2, 2015, Private Member’s Bill C-665, An Act to amend the Bank Act (international remittance transfer fees), received first reading in the House of Commons
- On April 15, 2015, Private Member’s Bill M 215, Business Practices and Consumer Protection (Money Transfers) Amendment Act, 2015, received first reading in the British Columbia legislative assembly
- On April 15, 2015, Private Member’s Bill 88, Consumer Protection Amendment Act (Money Transfers), 2015, received first reading in the Ontario legislative assembly.
These private members’ bills, all introduced by NDP members, propose to limit the fee that can be charged for a money remittance to five per cent of the amount transferred. All three bills also propose a requirement to disclose, in respect of each money remittance, the total fees payable and the applicable exchange rate, if any. Unlike the federal bill, which would amend the Bank Act and apply only to banks, the provincial bills define “money transferor” as a supplier who transfers money for or on behalf of consumers through any person or entity and by any means, including an electronic funds transfer network or an alternative remittance system. However, the provincial bills do not propose a licensing or registration regime for money transferors, such as the money services business regime introduced in Quebec in 2012.
While private members’ bills do not often become law, they do bring matters to the attention of the government, the media and the public. Notably, this is reminiscent of the way in which gift and prepaid card regulation gained traction. Private members’ bills on that topic were introduced in some provinces ahead of the government passing legislation. The proposal in the federal budget regarding remittance services confirms that this topic is now on the federal government’s radar. Where there is smoke, there is bound to be regulation.