As reported in our post on April 21st, the federal budget speech released last April either announced or provided updates on a number of important regulatory initiates relating to the federal financial services sector. Given the timing of the federal election this fall, it now appears likely that these initiatives will not be brought forward until at least 2016.
The initiatives announced in the budget included:
- A new consumer protection framework for banks and specific targeted consumer protection measures
- A bail-in regime for Domestic Systemically Important Banks (D-SIBs)
- Restrictions on the use of Canada Mortgage and Housing Corporation (CMHC) portfolio insurance and insured mortgages in relation to securitizations
- A review of the rules relating to the confidentiality of supervisory information communicated to banks, insurance companies and other federally regulated institutions and the oversight provided by the various federal agencies that play have a supervisory role
- Measures to support the development and growth of credit unions
- The possible regulation of “national retail payments systems”
On May 7th, the government introduced Bill C-59, or the Economic Action Plan 2015 Act, No. 1, but the Bill only included a proposal dealing with the confidentiality of supervisory information. Since the proposed legislation is referred to as “No. 1” the plan seems to have been to deal with the remaining issues in a second Bill. However, time seems to have run out for this government to have anything implemented before the election.
No more time on the legislative calendar
Under the Parliamentary calendar for 2015, the last sitting day before the summer recess is June 23rd. Although in a normal year Parliament would reconvene on October 1st, as a general election will be held on October 19th, the House will not resume sitting until after the election, probably November at the earliest. Given the normal parliamentary process for passing a Bill, including the requirement that a financial services Bill be referred for study to the House Finance Committee, even if a second Bill were introduced before the June 23rd summer recess, there is simply no more time left for a Bill to be passed into law before the end of the year. Of course, if the election results in a government other than a Conservative majority government, the measures may be further delayed or completely abandoned.
While this delay does provide an opportunity for further work to be done on the proposals, it also creates uncertainty about the rules that will apply which can impact on future planning.