Honourable senators, my question is for the Government Representative in the Senate. More than three years ago, the government announced its review of the merits of open banking. Two years ago, our Standing Senate Committee on Banking, Trade and Commerce published a report stating that open banking is urgently needed for the benefit of consumers, especially those who are marginalized, and to help keep our financial sector strong and globally competitive.
I was pleased that our new finance minister seemed to prioritize open banking when, early in her tenure last fall, she restarted consultations between financial institutions and financial innovators under the leadership of her Advisory Committee on Open Banking. I understand that she has received a report. Yet we have continued to stand on the same starting line for more than three years now.
This is worrisome because other nations have rapidly moved ahead with modernizing their financial systems to the benefit of consumers, implementing new legislation, updating regulations and iterating where needed. Yet we remain on the starting line.
My question is: When can we expect the finance minister to release the advisory committee’s report and hopefully announce decisive action versus intention?
Hon. Marc Gold (Government Representative in the Senate)
[ + ]
I thank the honourable senator for the question. The government thanks the Senate committee for the report and for the recommendations that were contained therein.
As the financial sector is becoming increasingly digitalized and in order to ensure the privacy and security of Canadians, the government is reviewing consumer-driven finance or open banking in Canada. The Advisory Committee on Open Banking, as you know, was appointed in 2018 to conduct this review and to provide advice on potential solutions and standards to enhance data protection in the financial sector.
Your advance notice of this question allowed me to inquire with the government. I have been advised as follows. Following the first phase of the government’s review of open banking, which was guided by the advisory committee, the Department of Finance did issue a report in early 2020 entitled Consumer-directed finance — the future of financial services. It’s available online.
The second phase of the government’s review of open banking also began in that year, 2020, and included a public consultation period in December of that year. Details of the second phase are not yet available, but I have been advised that the government will have more to say about this in due course. If the honourable senator would like, perhaps I could try to facilitate a conversation between him and any interested senators with the minister’s office.
Thank you to the government representative. Given the fact that Bill C-11, which is foundational in terms of providing opportunity for new entrants to get into the digital economy and the speed at which technologies are evolving globally, increasing risk to financial consumers and lost opportunities, and the extent to which our banks in fact have been increasing fees recently while seeing dramatically increased profits and executive bonuses, I’m getting a sense of inaction or promised future action. Does the government appreciate, to your understanding, the extent to which Canadians are losing out due to the lack of a made-in-Canada competitive environment within our financial system?
I thank the honourable senator for the question. To the best of my understanding, senator, the government understands very well the importance of it. That’s why it has taken the initiatives that it has. The circumstances that we are in, which need not be underlined, are such that progress is clearly not as quick as many would like, but the government remains committed to moving forward.