By Christine Dobby
(Bloomberg) — Canada’s government is taking aim at competition in the financial sector, pledging to tackle fees, make it easier for consumers to switch banks and reduce regulatory burdens for smaller lenders.
Ottawa described the proposed changes, published in Tuesday’s federal budget, as the first phase of a plan to lower everyday banking costs for Canadians and spur more innovation in the industry, which is dominated by a handful of big lenders.
The measures include a promise to ban fees for transferring investment accounts and to shed more light on foreign-exchange and cross-border money transfer levies. The government has also asked the Financial Consumer Agency of Canada to prepare a report on fees charged by Canadian banks.
Prime Minister Mark Carney’s government said it plans to work with banks to simplify the process of switching primary chequing accounts, but stopped short of outlining rules to force such changes.
In a speech last month, Carolyn Rogers, senior deputy governor of the Bank of Canada, pointed out the country’s six biggest lenders control 93% of all banking assets, calling them an oligopoly. “To state the obvious, this is a very high level of concentration,” she said, adding the country’s lenders are also consistently more profitable than their peers in other advanced economies.
Rogers cited a 2024 survey by FICO that found 69% of Canadians haven’t switched their primary bank in the past decade and 29% have never switched banks. The reasons, she said, include reams of paperwork, concerns about missing or delayed payments and deposits, plus “fees – lots of fees.”
Open banking, which is billed as a way to let consumers easily share their data with other financial institutions or third parties such as budgeting apps, would help smooth the path for switching banks, she said.
Ottawa first introduced the idea in 2018 and, after years of delays, the government said the budget implementation bill will include legislation to enact what it now calls “consumer-driven” banking. Key elements such as switching accounts or making bill payments will be possible by mid-2027, it said.
It will delegate oversight of the Consumer-Driven Banking Act to the Bank of Canada and earmark up to $19.3 million over two years for implementation costs. That’s a change from last year, when the FCAC assumed responsibility for consumer-driven banking — along with a budget of $36.9 million over two years, which will no longer be spent.
Regulatory burden
The budget also proposed allowing small lenders to get bigger before requiring public ownership of their shares and making it easier for them to raise funding. And Ottawa said it will relax credit union regulations to help them scale across the country.
These promises follow recent comments from the federal banking regulator about changing capital rules to allow smaller financial institutions to better compete.
On the innovation front, the government said the budget bill will include a legal framework regulating stablecoins, a type of digital currency pegged to the value of a fiat currency such as the Canadian dollar, tapping the Bank of Canada to administer this legislation as well.
The move comes after the U.S. passed the Genius Act in July to create a regulatory framework for stablecoin issuers. The European Union, Singapore and Hong Kong also have stablecoin rules and tech lobbyists have been calling for the Canadian government to catch up.
Telecom competition
The government’s push to make it easier to switch banks is similar to its efforts to spur more competition in the telecommunications sector, a theme to which it also returned in Tuesday’s budget.
Ottawa said it will work with the country’s telecom regulator to pass rules to let Canadians renew or switch between home internet and mobile plans more easily. It also plans to pursue “dig once” policies to support better coordination between telecom providers as they install fibre-optic cables and communications towers.
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Last modified: November 4, 2025