Financial Sector Policy Branch

- Financial Sector Division - Financial Markets Division - Financial Institutions Division -

The Branch is responsible for providing policy analysis on Canada’s financial sector and on the regulation of federally chartered financial institutions (banks, trust companies, insurance companies, credit unions and other financial institutions). It also manages the federal government’s borrowing program and provides support to the Minister regarding Crown corporation borrowing and financial market and exchange rate policy. The Branch is composed of three divisions.

Financial Sector Division

This division develops and evaluates policies on the regulatory framework for Canada’s financial institutions and is composed of five sections.

Financial Sector Stability

This section provides policy advice and analysis on financial regulatory and stability issues in a Canadian and international context in consultation with the Office of the Superintendent of Financial Institutions (OSFI), the Canada Deposit Insurance Corporation (CDIC) and the Bank of Canada. It also coordinates Canada’s position on international regulatory and supervisory issues at the Organisation for Economic Co-operation and Development, G-7 and Asia Pacific Economic Cooperation forum. 

Payments

This section provides policy advice on payments system clearing and settlement issues. It has responsibility for providing advice on the regulatory oversight of the Canadian Payments Association. This section also provides policy advice and analysis respecting the regulation and supervision of federally registered pension plans in consultation with the Office of the Superintendent of Financial Institutions (OSFI).

Intergovernmental Issues

This section provides policy advice in regard to the federal government’s relations with provincial and territorial governments in the area of financial services. it advises on policies that will help foster a strong, competitive, and sound capital markets for the Canadian economic union. It monitors, and analyses the implications of, provincial and territorial financial sector developments for federal policy, federally regulated financial institutions, and for the coherence and effectiveness of financial sector regulation in Canada as a whole.

Financial Crimes

Work in this area is divided between two sections, which develop and analyze policies related to combating money laundering and the financing of terrorism. The International Section supports Canada's international role in combating financial crime and terrorism financing by developing Canadian policy positions for international fora including the G-7, G-20, IMF, World Bank and the Financial Action Task Force, the key international body for fighting money laundering and terrorist financing, as well as similar regional bodies such as the Asia-Pacific Group and the Caribbean Financial Action Task Force. The Domestic Section is responsible for developing policies and coordinating domestic efforts in respect of Canada's anti-money laundering and anti-terrorist financing regime, including the implementation of international standards. Both Sections work closely with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), law enforcement and other government departments and agencies.

Financial Markets Division

This division is made up of three sections, which together provide policy analysis and advice on the federal government’s financing operations and on financial market developments.

Government Financing and Capital Markets Policy

This section provides analysis and policy advice on Crown corporation borrowing and related activities, on government loans, loan guarantees and special purpose borrowings, the investment of government funds by foundations and endowments, the development of capital markets, the governance of the Canada Pension Plan and the Bank of Canada, and the supply of circulating currency.

Debt Management Policy

This section provides policy analysis and advice relating to managing the Government’s public debt and implementing the borrowing program, and provides intelligence and analysis about financial market developments. The Section interacts regularly with the Bank of Canada.

Reserves and Risk Management

This section provides policy analysis and advice on the management of Canada’s international reserves and management of the risk associated with the Government’s financial assets and liabilities.

Financial Institutions Division

The Division’s mandate is to provide analysis and advice on structural, consumer and competition issues, as well as advice on transactions requiring ministerial approval, including potential mergers. In collaboration with the Financial Sector Division, it is also responsible for regularly updating financial sector legislation and regulations. In addition, the Division conducts research on and analyzes trends within the sector, including financial institutions’ corporate strategies and performance, electronic banking and commerce, the impact of globalization and emerging technologies (Internet), and other issues related to the financial services sector. The Division is made up of four sections.

Competition Issues and Transactions

This section monitors and advises on major financial transactions, including mergers and acquisitions. It is responsible for providing advice on the government's mortgage insurance guarantee. It also conducts research and analyzes trends within the financial sector, including financial institutions’ corporate strategies and performance.

Strategic Planning and Trade

This section is responsible for strategic planning and communications related to financial sector issues and priorities, including legislative and regulatory reforms, for policy development related to credit unions and for the preparation and regular update of sector profiles. It also manages relationships with parliamentary committees, parliamentarians and other government agencies and departments in the area of policy development. In addition, this section is responsible for the federal government’s relations with foreign governments in the area of financial services, namely bilateral relations, the administration of Canada’s commitments under the North American Free Trade Agreement and the World Trade Organization General Agreement on Trade in Services, international trade negotiations related to these agreements, as well as other bilateral and multilateral initiatives.

Consumer Issues

This section is responsible for consumer-related issues in the financial services sector. It develops policies and legislation in such areas as access to financial services and, disclosure of service fees. The section is also responsible for liaising with the Financial Consumer Agency of Canada, which is a federal agency established to ensure compliance with the consumer provisions of the Bank Act and to promote consumer awareness of financial services and products.

Structural Issues

This section develops policy on structural issues related to corporate organization, permitted activities, and regulation of financial institutions. Specifically, it provides policy advice on ownership, investments, foreign entrants, holding companies and corporate governance. This work encompasses the review of past legislative developments, and of international considerations and best practices as they relate to changes in the Canadian financial services sector.