Annual lists 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995

Ottawa, February 7, 2001
2001-014

Government Reintroduces Legislation to Create New Policy Framework for Financial Services Sector

Related documents:

• Summary of Key Legislative Measures.
• Merger Review Guidelines (MRGs).
• Recategorization Guidelines for Former Schedule I Banks With Equity of Less Than $5 Billion.
• Low-Cost Accounts Memoranda of Understanding.
• Bill C-8: An Act to establish the Financial Consumer Agency of Canada and to Amend certain Acts in Relation to Financial Institutions (Parliamentary Web site).

Secretary of State (International Financial Institutions) Jim Peterson, in conjunction with Finance Minister Paul Martin, today reintroduced legislation to reform the policy framework for Canada's financial services sector, which includes domestic and foreign banks, trust companies, insurance companies, credit unions and other financial institutions.

"Getting this legislation passed quickly would implement important reforms for a sector that is a key contributor to the overall performance of the Canadian economy," Minister Martin said. "It would ensure that Canadian financial institutions remain internationally competitive, that consumers are adequately protected and that they continue to receive the highest quality services at the best possible price."

Secretary of State Peterson added that the legislation would also "increase competition in the domestic marketplace by encouraging new entrants through liberalized ownership rules, by expanding access to the payments system, and through more flexible regimes for credit unions and foreign banks."

The new legislation replaces Bill C-38, which died on the order paper when Parliament was dissolved last fall. It is substantially the same legislation in that there have been no policy changes in the intervening time period, although it does include a number of technical amendments and clarifications based on comments made before the House of Commons Standing Committee on Finance last fall.

The legislation would provide Canada's financial services sector with a framework that promotes efficiency and growth, fosters international competitiveness and domestic competition, empowers and protects consumers of financial services, and improves the regulatory environment.

Secretary of State Peterson stated that "the Government has worked closely with the industry, consumer groups, stakeholders and other government agencies to develop this legislation, and there is a strong consensus on the need to have it in place as soon as possible."

The Secretary of State pointed to the recent signing of memoranda of understanding on low-cost accounts with the eight major banks, the details of which are being released today, as evidence of this consensus (see the attached table for further details). "We intend to continue working with the industry, consumer groups, stakeholders and other government agencies as the bill is reviewed over the coming months," he said.

Minister Martin is also releasing revised merger review guidelines to clarify that the Standing Senate Committee on Banking, Trade and Commerce will also be asked to review the Public Interest Impact Assessments and hold public hearings.

In addition, the Minister is releasing recategorization guidelines for former Schedule I banks with equity of less than $5 billion. These guidelines provide a framework for considering cases where one of these institutions requests a change from widely held to closely held ownership status.

Attached are a summary of key legislative and non-legislative measures contained in the policy framework and related documents.

________________
For further information:

If you would like to receive automatic e-mail notification of all news releases, please visit the Department of Finance Canada Web site at: http://www.fin.gc.ca/scripts/register_e.asp.