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It's Your Turn
Current Consultations
Consultations on Services Trade Negotiations
Online Questionnaire for Canadian Businesses
Financial Services
Background Information:
The financial sector in Canada includes banks, life insurance companies, property and casualty insurance companies, insurance agents and brokers, trust and loan companies, credit unions and caisse populaires, mutual funds, securities dealers, pension managers and investment advisers, as well as specialized finance companies. The following facts highlight the importance of the financial services sector to Canada and the lives of Canadians:
In 2000, Canada's financial services sector employed more than half a million people and represented approximately 5% of Canada's GDP. The industry's estimated assets and net income amounted to about $2.2 trillion and $16.3 billion respectively. In 2000, banks and other deposit taking institutions in Canada1 accounted for nearly 50% of total financial sector assets. The remainder was divided among life and health insurance (22%), mutual funds (19%), securities and commodities intermediaries (1%) and others (8%), including credit unions. Many Canadian financial institutions have a long history of being active abroad. As intermediaries, they were "brought" abroad, often by their Canadian clients that had significant export and/or production activities outside of Canada. Moreover, expanding internationally has enabled them to grow in spite of the maturity of the Canadian financial market. In particular, the foreign operations of Canadian banks and of life insurance companies account for almost 50% and 55% of revenue respectively. Their key foreign market is the United States. However, a number of Canadian financial institutions also have substantial interests beyond the U.S., for example, in South East Asia, and to a lesser extent in Latin America and Europe.
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Definition of Sector in the GATS
The GATS contains specific disciplines for the financial sector which are set out in the Annex on Financial Services, the Second Annex on Financial Services, and the Understanding on Commitments in Financial Services. The scope and coverage of GATS disciplines on financial services are defined in the Annex which sets out an illustrative list of measures affecting the supply of financial services to which the disciplines apply, as well as financial services activities which are excluded from the GATS (Article 1.b.iii).
Canada has scheduled its financial services commitments in accordance with the Understanding on Commitments in Financial Services.
What We Heard in Previous Consultations:
Priority Markets of Interest:
Canada's key export markets for financial services:
| Asia: |
China |
Japan |
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India |
Taiwan |
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Singapore |
Malaysia |
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Hong Kong |
Indonesia |
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Philippines |
Vietnam |
| Europe: |
United Kingdom |
Ireland |
| North America |
United States |
Mexico |
| South America |
Chile |
Brazil |
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CA4 |
Argentina |
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Costa Rica |
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| Caribbean: |
CARICOM |
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Market Access Barriers:
The majority of barriers to trade for this sector are found in South East Asia and Latin America.
Obstacles to trade identified in past consultations have included the following:
- restrictions on the type of legal establishment allowed
- foreign ownership rules
- lack of transparency in financial sector regulation
- denial of national treatment (i.e.: advantages locals over foreigners) in regulation, such as discriminatory capital requirements
- and restrictions on permitted business lines.
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1 Data for banks and other deposit taking institutions do not include credit unions and caisse populaires and are reported on a consolidated basis.
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