C-365 – The Consumer-led Banking Act – gives the Minister of Finance 30 days to present a plan to implement open banking in Canada.
If the Minister hasn’t presented a Bill to follow that plan within six months they will need to present a report outlining why it hasn’t been done.
What is Open Banking?
I’m going to add a bit of context here on just what open banking is and why C-365 exists.
First up, what’s open banking? Open banking would require banks and other financial institutions to set up a framework that allows your financial information to be easily shared with third-party services. The good thing about this is it would do things like make it easier to switch banks, and allow you to use third-party services to see if you’re currently getting the best interest rates on your savings accounts or track transactions from multiple banks. The downside is the usual risk where making data easier to share also makes it easier to sell or steal.
Now, why does C-365 leave such a short timeframe to implement this? It looks like we’ve had a committee in place to examine open banking since 2018. Their final report was released in 2021 and looks pretty comprehensive, so the consultations and research have already been done. If the Minister of Finance wanted to implement open banking they’ve already got a pretty good amount of recommendations to work with.
Party Opinions
It looks like the Liberals are against C-365 because it doesn’t have a lot of details on what the framework would look like and they’re already working on putting together their own framework.
The Bloc Québécois call out that we need to get a framework set up quickly. New companies are popping up requesting access to our financial information and don’t fall under existing regulations. This could lead to risks, such as who is responsible for a leak of your information if the company that caused the leak no longer exists. They also call out that we also have co-operative financial institutions, which aren’t banks and don’t fall under federal regulations. Setting up a framework that will help coordinate with provinces will help make sure everyone’s protected.
The NDP support C-365 but think that there’s a lot more that needs fixing when it comes to banking in Canada.
Progress of C-365
C-365 went up for its Second Reading vote and passed with 172 votes in favour and 150 votes against.
| Party | For | Against | Paired |
|---|---|---|---|
| Liberal | 1 | 149 | 1 |
| Conservative | 116 | 0 | 0 |
| Bloc Quebecois | 29 | 0 | 1 |
| NDP | 22 | 0 | 0 |
| Green | 2 | 0 | 0 |
| Independent | 2 | 1 | 0 |
Worth noting here that Nathaniel Erskine-Smith (Liberal, Ontario, Beaches—East York) is the one Liberal MP that voted in favour of C-365.
C-365 will now go to the Committee on Finance.