Mr. Speaker, it is always an honour to stand in the House to debate on matters on behalf of the great people of Steveston—Richmond East. Today, it is to continue on the debate on Bill C-69, the budget Implementation act for budget 2024, which is about reinforcing the promise that all Canadians should have a fair chance to build a good life, and about continuing to build a country that works for everyone. We are going to do that by building more affordable homes, by making life cost less and by growing the economy in a way that is shared by all.
Today I would like to talk about one element of Bill C-69 that could improve financial outcomes for Canadians: consumer-driven banking. Every Canadian deserves access to affordable, modern banking services to help them pay their bills, save money, receive their government benefits and build their credit. Budget 2024 includes measures to lower banking fees by capping non-sufficient fund fees, modernizing free and affordable bank account options, expanding financial help services, doing more to crack down on predatory lending and launching new consumer-driven banking tools.
Consumer-driven banking, also known as open banking or consumer-driven finance, provides a way for people and small businesses to securely transfer their financial data to different service providers, including banks, credit unions and accredited financial technology companies, fintechs. This could include apps that use data to provide automated budgeting and savings advice, help keep track of bills, secure a loan, find a better deal on insurance or on a currency exchange rate and track monthly rent payments to build up credit.
Consumer-driven banking provides real-time access to all financial accounts, products and services in one place and access to personalized tools and products to help improve financial health. It can play an important role in the future of the Canadian economy and increase consumers' choice and control over their financial data. It can help make life more affordable and even help young Canadians when it is time to buy a first home.
However, so far, in the absence of a framework, fintechs have been limited in their ability to develop new financial tools, largely due to a reliance on an unsecured process called screen scraping, which pulls data from a bank account by reading the account information. This requires consumers to share their banking credentials with fintech companies. An estimated nine million Canadians currently share their financial data this way, which raises security, liability and privacy risks to consumers and the financial system. I presume there may be hon. members present who have gone through this process and felt uneasy about it, as I have.
As first announced in the 2023 fall economic statement, the government published Canada's consumer-driven banking framework along with budget 2024, in order to drive an innovative consumer-driven banking system in Canada. As announced in budget 2024, the Financial Consumer Agency of Canada, FCAC, is mandated to oversee, administer and enforce Canada's consumer-driven banking framework.
FCAC's existing financial literacy and consumer education mandate make it well placed to help guide consumers who engage in consumer-driven banking. The mandate was informed by an extensive review of international jurisdictions and is in line with international best practices, offers administrative efficiency and allows for the timely delivery of consumer-driven banking in Canada.
At this point, I should also stress that the government would not be privy to any personal information or data.
I will move now to the bill before us. Bill C-69 introduces legislation to implement key components of the framework, including a new act, the consumer-driven banking act, and amendments to the Financial Consumer Agency of Canada Act. These legislative updates would establish the foundational elements of the framework, including governance and scope, as well as criteria and the process for the technical standard.
The amendments to the FCAC Act would create a senior deputy commissioner for consumer-driven banking, who would be responsible for the supervision of the framework. The commissioner of FCAC would retain full administrative control of FCAC and would continue to report to the Minister of Finance and Parliament. As well, the consumer-driven banking act would require FCAC to maintain a public registry of participating entities in the framework.
Once implemented, the framework would regulate access to financial data, providing Canadians and small businesses with safe and secure access to financial services and products that would help them manage and improve their finances.
The framework would also align with those of our largest trading partners, including the United States. In order to facilitate oversight of provincial entities while respecting their jurisdiction, provincial entities would be able to opt in to governance, supervision and participation. In the case of provincial credit unions, provinces would retain the authority to impose their own requirements.
Importantly, the functional scope for participating entities would be limited to “read access”. This means that participating entities would only be able to see, not change, the data held by another participating entity should a consumer request it. The scope would not include payment initiation, or “write access” as it sometimes is called. Furthermore, data could be obtained only if a consumer provides consent to the participating entity.
Access to data would be limited to what is specified in the legislation, which includes chequing accounts and savings accounts, investment products and lending products such as credit cards, lines of credit and mortgages. Regardless of an entity's size or business model, due diligence of its security controls would be conducted before allowing it to participate in the framework. This would help set an equal and high bar for security measures and give confidence to consumers that their data is safe.
Participating entities would be required to comply with existing privacy legislation as well. The framework would also include additional privacy rules that are unique to financial data sharing to address the provision of express consent to access data, consent management, and revoking access to data shared by a consumer. Participants would be required to have a standardized process for consent and revocation that would be done in a clear, simple and not misleading manner.
The proposed legislation represents a culmination of long-term engagement with industry, consumer groups and experts, and would deliver a made-in-Canada solution to the issue of screen scraping. There is alignment among stakeholders for the government's proposed approach, including fintech and the Canadian Bankers Association.
The government would continue to engage with industry, which would lead on the implementation of the framework in key areas, including technical standards, with oversight from the FCAC. This collaborative work would refine more complex elements, such as the accreditation framework and common rules for privacy, security and liability, to be introduced in additional legislation later this year.
Canada's consumer-driven banking framework, with government-led oversight of security requirements, technical standards and consumer protections, would enable consumers to securely and confidently exercise their right to use and move their data. Once the framework is operational, the government would consult with stakeholders to determine how and when to phase out screen scraping. This would include review of other jurisdictions' approaches to screen scraping.
Canada has a strong, well-regulated financial sector that has proven to be stable, resilient and trusted by Canadians. Consumer-driven banking would contribute to the strength of the sector and protect financial consumers, part of the government's plan to grow Canada's economy in a way that works for everyone. I encourage all hon. members to support the bill.
