On August 26, 2016, the Department of Finance Canada (Finance Canada) announced the launch of the first of a two-stage consultation process on the federal financial sector legislative and regulatory framework.
While acknowledging the high quality and reputation of the Canadian financial sector, Finance Canada noted that it is important to consult with Canadians with a view to advance the stability, efficiency and utility of the sector as it conducts its regular review of Canada’s federal financial sector legislative and regulatory as required by the legislation.
In its consultation document, Supporting a Strong and Growing Economy: Positioning Canada's Financial Sector for the Future, Finance Canada provides an overview of the Canadian financial sector’s landscape, and explains its policy context and focus on stability. Finance Canada describes the current trends and regulatory environment, notably the current macroeconomic backdrop, increased concentration and the changing competitive landscape, the internationalization of Canadian financial institutions, the evolving financial marketplace for consumers, the financial innovation and emergence of financial technologies (or Fintech), demographic changes (Canada’s aging population and the millennial generation), emerging risks (including the rise of catastrophic risks due to urbanization, terrorism, and climate and environmental change) and its three core policy objectives of stability, efficiency and utility. Finance Canada seeks input from Canadians on the trends that are highlighted in the paper, the implications of such trends and the areas where action is possible and desirable.
In this first stage of the consultation process, Finance Canada seeks input from stakeholders on the priorities for reviewing the financial sector framework to be set out in its policy paper to be published for consultation in 2017. Finance Canada asks the following questions:
- What are your views on the trends and challenges identified in this paper? Are there other trends or challenges that you expect to significantly influence the financial sector going forward?
- How well does the financial sector framework currently balance trade-offs between the three core policy objectives of stability, efficiency and utility?
- Are there lessons that could be learned from other jurisdictions to inform how to address emerging trends and challenges?
- What actions could be taken to strengthen the financial sector framework and promote economic growth, including with respect to the identified themes? How should those actions be prioritized?
- What other actions should be taken to ensure the financial sector framework remains modern and technically sound?
Written comments should be sent to Finance Canada by November 15, 2016.