Finance Committee on May 25th, 2026

[Greg McLean, Conservative, Calgary Centre, AB]

Okay, so let's call it roughly 45% in mortgages and 55% in business loans. Is that about right? Yes.

However, housing takes up only 11% of the Canadian economy, so do you think you're a little overlayered on personal real estate? Should more of your funds be invested in businesses across Canada, or is that risk profile not good in Canada at this point in time?

[Alex Ciappara]

That's a great question. I think it gets to the heart of the productivity crisis that we're challenged with right now. Unfortunately, because of the way the capital risk weights are set up right now, banks devote less capital to mortgages than they do to businesses.

In terms of capital regulation, there are standardized and advanced models. We've been pushing hard for OSFI to review the risk capital models, and that's why we're very supportive of OSFI's review of the standardized capital risk weights. We've seen their proposal to reduce capital risk weights on business loans from 85% to 75%, and we'd like to see that implemented.

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you. I apologize that I have little time. I have a whole bunch of questions for the other members.

I'm going to jump to the issue of money laundering and the financial crimes agency.

I've been a member of Parliament for six and a half years now, and we've been moving on this financial crimes agency and anti-money laundering legislation for that entire six and a half years. We don't know what's taking so long, but we do want this to move very quickly.

Can you tell us what has held up the government on this so far?

[Hartland Elcock, Assistant General Counsel and Vice-President, Canadian Bankers Association]

I would contextualize by saying it is a big lift to get the legislation before Parliament and actually introduce the financial crimes agency. We're very impressed that the government has put that forward, and we're strong supporters of it, particularly the structure of it.

[Greg McLean, Conservative, Calgary Centre, AB]

Let me suggest that you're easily impressed. I've seen it in front of the House of Commons a number of times so far in a bunch of budgets.

Let me ask one of your colleagues.

Ms. Karringten, what do you think of the anti-money-laundering laws and regulations that are coming forward? Are they something new, and how do they fit into your universe?

[Koleya Karringten]

Sitting on the Department of Finance Canada's anti-money-laundering and terrorist financing committee, I would say that there are some fairly robust frameworks currently being implemented. I have heard of the stand-up of this committee, and I applaud that they want to form it.

From my understanding, there are about two individuals who are currently sitting on it. I'm curious about how the expansion and the mandate are going to engage. There's going to be a fair bit of communication needed among the different entities of FINTRAC, the Department of Finance and different committees. It's hard for me to properly formulate anything on it, because I haven't seen—

[Greg McLean, Conservative, Calgary Centre, AB]

Let me try to move on to the issue of regulation.

The banks and a lot of our financial institutions are overseen by the Office of the Superintendent of Financial Institutions. It's actually the Bank of Canada that oversees cryptocurrency or stablecoin as a payments instrument.

Given that the likely issuer of a cryptocurrency will be the Bank of Canada, do you think that it serves the cryptocurrency ecosystem in Canada well if the regulator is also a competitor?

[Koleya Karringten]

No, I do not believe that it serves the ecosystem. I believe it should be through independent retailers, such as what Tetra is working to do, or Transactix or Stablecorp. I don't believe that allowing a regulator to also be a competitor creates a fair playing ground for innovative businesses in Canada that are trying to introduce new products to the market.

[Greg McLean, Conservative, Calgary Centre, AB]

Thank you.

I'm going to move to Ms. Rohani now on the same question.

Ms. Rohani, if the central bank digital currency proposed by the Government of Canada in its latest budget comes to pass and there is no ability to make payments or get rewards for investing in that CBDC, what is the impetus to move over from the yield-paying or reward-offering digital currencies offered elsewhere through the U.S. dollar?

[Morva Rohani]

I would say that the Bank of Canada is the right prudential regulator for stablecoins. We support that, but I agree with Ms. Karringten that a regulator should not also be a competing issuer. That creates a structural conflict that disadvantages private Canadian issuers from day one.

On a note of being precise, a CBDC and a stablecoin are different products. CBDC is central bank money issued directly by the Bank of Canada. A stablecoin is a privately issued payment instrument backed one to one by reserves.

My understanding is that the Bank of Canada has also paused their active CBDC work and that their focus right now is on private Canadian dollar stablecoins under federal oversight—

[The Chair, Liberal, Karina Gould]

Thank you, Ms. Rohani. I'm going to have to end it there. That concludes our time.

Thank you, Mr. McLean.

Before I go to Mr. Sawatzky, Mr. Elcock, when you speak next, the interpreters want you to lower your mic a little bit. Thank you very much.

Next is Mr. Sawatzky for six minutes.

[Jake Sawatzky, Liberal, New Westminster—Burnaby—Maillardville, BC]

Thank you, Chair.

Thank you to the witnesses for coming today.

Ms. Oliver, I have some questions.

Over the past few years, the federal government has taken steps to strengthen the consumer protection framework, including enhanced oversight of financial institutions and expanded tools for consumer awareness. In this context, could you speak to how effective current consumer protection measures have been in supporting Canadians?

[Jessica Oliver]

Wealthsimple is a securities dealer. Our principal regulators are the Ontario Securities Commission and CIRO. We obviously follow the FCAC in their work on consumer protection, but I don't know that I could speak intimately to their oversight because we operate primarily.... Aside from AML and payments through the RPAA and through FINTRAC, I'm not that familiar.

[Jake Sawatzky, Liberal, New Westminster—Burnaby—Maillardville, BC]

No worries.

Until recently, banks would make hundreds of millions of dollars off people by charging them various fees. Can you tell us how much the recently announced cap of $10 for non-sufficient fund fees or providing access to accounts for no more than four dollars per month will save Canadians?

[Jessica Oliver]

The FCAC, in its consumer protection measures, has service standards for the transfer of registered investment accounts that actually apply to both federally regulated and provincially regulated entities. The obligation is to “strive” to make these transfers in a timely fashion. To “strive” is, I would say, insufficient in our experience, given, for example, the five-month delay in 10% of our transfers.

When it comes to the NSF fee cap, we don't charge NSF fees. There was a long delay between the announcement of that consumer protection measure and its actual implementation. Our strong encouragement to the government is that while Canadians have applauded the commitment to ban those account transfer fees, the ban should be implemented without delay, because it is difficult to understand why it's taking so long to implement.

[Jake Sawatzky, Liberal, New Westminster—Burnaby—Maillardville, BC]

There have been concerns around slow transfers and high exit fees, as you mentioned in your opening remarks. How do you see open banking improving data portability and reducing barriers for consumers?

[Jessica Oliver]

I'm going to be so excited, because there's a lot happening. It's all coming together at a similar time.

There have been questions before about who's asking for this. When it arrives, we will all see very clearly that you couldn't know to ask for something that you hadn't experienced, but when you experience it, you won't be able to believe that you used to have to send your university tuition payment a week in advance to avoid a late fee. The real-time rail will let you work until the end of your shift at midnight on the day your tuition is due before you send it, or your utility bill or what have you.

As for open banking, it's the ability to see your full financial picture, including your workplace pension, which fewer and fewer Canadians have but it's an example of something that you wouldn't necessarily see, even if you have everything at one financial institution. It gives the ability to share certain things with your spouse so that you can plan for your future and take advantage of all these amazing tools that exist to budget and make decisions based on your unique circumstances.

We have had a good, stable system, but a pen is a pen. There's a paintbrush. There's a pencil. There are other ways folks can choose to get their message across.

I think there are going to be insights. If you own a home before the age of 35, if you have a workplace pension and if you get paid an amount you know you can count on every two weeks, you don't have to apologize for it, but you do have to recognize that this is not the experience of the majority of people. It's not all people. It's not the experience of the majority of people, and—

[The Chair, Liberal, Karina Gould]

Thank you, Ms. Oliver. We have to end it there.

Thank you, Mr. Sawatzky.

We'll continue with Mr. Garon, for six minutes.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Thank you, Madam Chair.

I thank the witnesses for joining us.

Ms. Rohani, I understand that Canadian digital sovereignty is important to your organization. Many telecommunications companies that appeared here said they were disappointed that the productivity superdeduction, as the Liberals call it, is nothing but an accelerated depreciation policy, as is the case in many places. The difference is that when the government implemented this policy, it chose the winners, in this case six sectors, which means that today, when companies develop fibre optic networks in Canada, they don't have access to this superdeduction.

Do you think this superdeduction should apply to Canadian companies developing fibre optics?

[Morva Rohani]

Thank you so much for the question.

If you're referring to an analogy.... I represent only digital asset firms, so I can't really speak to telecommunications matters. If your question is about extending some of those benefits to other industries, I'd be happy to answer the question.

[Jean-Denis Garon, Bloc, Mirabel, QC]

I was referring to the importance of offering this deduction to strengthen our digital sovereignty and Canada's fibre optic network. It's okay; we can come back to it.

I'd like to turn to the representatives of the Canadian Bankers Association, whom I welcome.

We work a lot with your colleagues in Quebec, and you're always there to keep us informed. You always answer our call. Thank you very much. We disagree on certain things, especially on how to handle fraud. In the United Kingdom, the regime provides that banks are, in fact, responsible when someone is the victim of bank fraud. That has encouraged banks to invest.

I know you're doing a lot of work to raise awareness across the ecosystem. However, in the United Kingdom, banks are held responsible. That has prompted them to invest heavily in fraud prevention, resulting in an 80% reduction in cases.

Do you think an 80% reduction is a success?

[Alex Ciappara]

Thank you very much for the question. I'll pass on your regards to my colleague Eric.

In terms of the fraud issue, our preference is to look at Australia as a leader country. They've put in place a multisectoral group of companies and organizations to fight fraud: telecommunications, digital platforms, banks, law enforcement and governments. We've seen a decline in fraud in Australia, and we'd like to import that same model into Canada.

We've seen that 85% of frauds start from telecommunications and digital platforms. It's critical that we have them on board as part of this fight. This is why we're supportive of the national anti-fraud strategy. It's because they do exactly that.

[Jean-Denis Garon, Bloc, Mirabel, QC]

You referred to a study by the International Monetary Fund, or IMF, according to which interprovincial barriers are equivalent to tariffs of 9%. Are you referring to the IMF's econometric study that is purely theoretical and in which provincial geography and governments don't exist?

I wonder if you're referring to the same study, because the IMF study that I read doesn't say what you're saying.

[Alex Ciappara]

I believe it is, yes.

[Jean-Denis Garon, Bloc, Mirabel, QC]

It'd be a good idea to read it correctly before quoting it, otherwise it generally misleads Canadian voters.

Ms. Oliver, let me put on my economist hat. You're talking about fees and you're being very diplomatic. I think Wealthsimple is trying to break into the banking market, which isn't easy. It's hard to change banks in Canada. Customers are captive. Even though there are a number of businesses, the Canadian banking community is concentrated. It meets a number of criteria of what we could broadly call a monopoly.

Do you think there's enough competition in the Canadian banking sector?