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Ottawa, November 27, 2006 Canada’s New Government Tables Legislation to Strengthen Canada’s Financial SystemRelated document: The Honourable Jim Flaherty, Minister of Finance, today tabled legislation to ensure Canada continues to be a world leader in financial services. "This legislation will help modernize our regulations, cut red tape and advance the interests of consumers," said Minister Flaherty. The Government of Canada regularly reviews the statutes that govern federally regulated financial institutions, including domestic and foreign banks, trust companies, insurance companies and cooperative credit associations. To give Parliament enough time to consider this legislation, the sunset date for the financial institutions statutes was extended by six months to April 24, 2007. The proposed legislation is largely based on the June 14, 2006, policy paper entitled 2006 Financial Institutions Legislation Review: Proposals for an Effective and Efficient Financial Services Framework. The proposed changes introduced today include:
Further information is contained in the attached backgrounder. A copy of the June 14 policy paper can be viewed on the Department of Finance website. ___________________________________
If you would like to receive automatic e-mail notification of all news releases, please visit the Department of Finance website at www.fin.gc.ca/scripts/register_e.asp BackgrounderFinancial Institutions Legislation ReviewBackgroundCanada’s federally regulated financial institutions play a pivotal role in the national economy and in Canadians’ lives. The sector employs about 700,000 Canadians and represents about 6 per cent of Canada’s gross domestic product. The Government of Canada is responsible for ensuring that the regulatory framework allows financial sector participants to operate as efficiently and effectively as possible in serving consumers and businesses, while maintaining the safety and soundness of the sector. The regular five-year review of the financial sector framework is an important tool in meeting these responsibilities. The last legislative review was completed in 2001, when Bill C-8 came into force. At that time, the sunset date for the financial institutions statutes was set at October 24, 2006. In Budget 2006, the Government extended the legislated sunset date for the financial institutions statutes by six months, from October 24, 2006 to April 24, 2007, to provide Parliament with sufficient time to consider this important legislation. ConsultationsOn June 14, 2006, the Government issued a policy paper entitled 2006 Financial Institutions Legislation Review: Proposals for an Effective and Efficient Financial Services Framework. In response, the Government received comments from about 30 stakeholders—industry associations, consumer groups, individual Canadians and other groups—on the implementation of the proposed framework. The comments were generally supportive of the proposals laid out in this white paper. The proposed bill takes into account the submissions received. Key Legislative MeasuresThe proposed legislation, which is largely based on the June 14 white paper, will enhance the interests of consumers, increase legislative and regulatory efficiency, and adapt the framework to new developments. The legislation will enhance the interests of consumers by including such measures as:
The legislation will increase legislative and regulatory efficiency by including such measures as:
The legislation will adapt the framework to new developments by including such measures as:
In addition, as mentioned in the Government’s economic plan, Advantage Canada, the bill proposes changes allowing Canadian financial institutions to add more foreign experts to their boards as long as the majority of directors remain Canadian residents. The changes will allow Canadian institutions to attract expertise, strengthen their networks and enhance their capacity to pursue global business opportunities. |
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