Thank you for the question.
If an IGA had not been negotiated, the consequences for Canadian financial institutions would have been significant. Financial institutions would have to negotiate individually with the IRS to come into compliance with FATCA. If they did not do so, they could be subject to a 30% withholding tax. The IGA gets around this.
It also is beneficial, given privacy concerns; instead of financial institutions reporting directly to the IRS, they now report to CRA, which then reports to the IRS.