CDIC operates within the framework of Canada's political and financial systems. Describing this framework is useful for understanding the responsibilities of a deposit insurer generally, and CDIC's legislative objectives and responsibilities specifically.

Under the Canadian Constitution, the federal government has certain powers or rights which are applicable to the country as a whole. One of those powers is the ability to incorporate banks and other federal deposit-taking companies which normally operate in several or all areas of the country.

Provincial governments also have constitutional powers or rights which are separate from and independent of the federal government. These are applicable only in their province of jurisdiction. One of their powers includes the ability to incorporate provincial deposit-taking companies. These institutions may operate only within their province of incorporation unless permission to operate in another province is granted by another provincial government.

Canada has four major groups of players in its financial system:

• the financial intermediaries, which consist of banks, trust and loan companies and credit unions/caisses populaires


• the fiduciary industry, which is restricted to trust companies


• the insurance industry, which is made up of life and property and casualty companies


• the securities industry, consisting of securities dealers and mutual funds.

Of these four groups, commonly referred to as the financial pillars, CDIC only insures deposits made at banks, trust companies and loan companies.

Last modified : 3 October 2001