Thank you very much, Madam Chair.
Good afternoon and thank you for the invitation to address the committee's study on pre-budget consultations in advance of the 2026 budget.
My name is Alex Ciappara, vice-president and head economist of the Canadian Bankers Association. I'm joined by Hartland Elcock, assistant general counsel and vice-president.
The CBA is the voice of more than 60 domestic and foreign banks operating in Canada. It advocates for public policies that contribute to a sound, thriving banking system to ensure Canadians can achieve their financial goals. Canadian households, businesses, employees, governments and shareholders—a significant portion of whom are Canadians—all have a stake in a growing, vibrant banking sector. Banks help families buy a home and save for retirement. They help small businesses grow and thrive while providing economic benefits to all Canadians today and into the future.
For instance, Canadian banks have approved $1.7 trillion in residential mortgages and an additional $1.9 trillion in business credit. Banks employ close to 300,000 Canadians and contribute $74 billion to Canada's economy. Lastly, they have paid $16 billion in taxes to all levels of government in Canada and $29 billion in dividend income to investors in 2025. It is from this perspective that we come to you today as partners in building, protecting and empowering Canada for Canadians.
Our pre-budget submission makes six recommendations that address these objectives. For instance, to help Canadians build, our recommendations regarding prudential regulation and tax reform will promote productivity growth in Canada. Lagging productivity levels risk wage stagnation, put pressure on public services, increase production costs and diminish global competitiveness. Adjusting the prudential capital framework will enable banks to flow even more capital to individuals and businesses to support jobs and economic growth domestically and to compete effectively internationally.
Furthermore, we recommend that the government action its commitment to review the corporate tax system, including reviewing the removal of sector-specific taxes, such as those on the financial sector.
To help protect Canadians, our recommendations address fraud, scams, money laundering and terrorist financing. The CBA has been a leader in bringing together approximately 50 public and private partners, including regulators, financial institutions, telecommunications providers, law enforcement and digital platforms, in forming the Canadian anti-scam coalition to advance coordinated education, awareness and prevention initiatives.
We believe the federal government's national anti-fraud strategy, announced in budget 2025, is a critical step toward a unified cross-sectoral response. In addition, we believe the government must implement an income-verification solution to address mortgage fraud.
Similarly, we believe Canada's AML and ATF framework must continue to evolve into a fit-for-purpose framework that more effectively targets money laundering and terrorist financing. The financial crime environment is rapidly changing. Criminal networks are increasingly sophisticated. Technology is advancing and geopolitical dynamics are fluid. The AML and ATF regime must be ready to respond to these challenges. This is why we are supportive of the government's announcement regarding the establishment of the financial crimes agency. We have additional ideas to improve the system.
Lastly, to empower Canadians, our recommendations include better ways to promote competition and measures to reduce internal trade barriers. We believe budget 2025's announcement to prohibit fees on investment and registered account transfers across institutions and to require timely transfers of investment funds must apply to all plan providers so that it benefits all Canadians. In order to do this, the Income Tax Act must be leveraged to implement this prohibition so that it applies to all financial institutions and helps all Canadians.
Similarly, Canadians right across this country can benefit from the reduction of internal trade barriers. The IMF estimates that such barriers are equivalent to an average annual tariff of 9%. From a financial sector perspective, this means eliminating duplicative, overlapping or fragmented requirements in favour of harmonized frameworks that promote clear, consistent rules nationwide and streamline compliance, particularly in the areas of AML and ATF, privacy, market conduct of payment service providers and over-the-counter derivatives.
In conclusion, the CBA appreciates the opportunity to contribute to the committee's study on pre-budget consultations for the 2026 budget to help build, protect and empower Canadians. We look forward to your questions.