Canadian government defends innovation policy record after fintechs’ criticism

By on 22/12/2022 | Updated on 22/12/2022
A photo of Parliament Hill Ottawa Image by Paula Cowan from Pixabay
A photo of Parliament Hill Ottawa, Image by Paula Cowan from Pixabay

Canada’s government has defended its commitment to innovation after criticism from a newly re-named industry association representing the fintech sector.

Fintechs Canada – formerly operating as Paytechs of Canada – marked its new identity by stating in an announcement that “with new regulation needed, slow progress on innovation policy and unbalanced representation in [capital city] Ottawa, a unified voice for fintech in Canada has never been more important”.

The association stated that it was “launching to advance a whole-of-government approach to supporting Canada’s emerging fintech ecosystem” and that it “will do this by working with policymakers, as well as educating the public and raising awareness of the benefits of Canada’s fintech sector”.

Department of Finance Canada’s deputy spokesperson Caroline Thériault told Global Government Forum’s sister title Global Government Fintech that the government was “committed to responsible innovation in the financial sector” and that it “welcomed the contribution of the fintech industry through the launch of Fintechs Canada”.

Thériault said that a “robust” innovation policy agenda had been laid out in Canada’s Digital Charter, presented in May 2019, with the government “work[ing] closely with all stakeholders to shape its implementation”.

Thériault also emphasised progress towards establishing an open banking system. Canada’s first open banking lead was appointed nine months ago but the country is playing catch-up with nations including the UK (where the government itself is pioneering the use of open banking) and, more recently, Australia (where the relevant legislation has expanded from banking into the energy sector).

Fintechs Canada to ‘work with government officials to promote responsible innovation’

Fintechs Canada lists more than 40 members on its website, including Mastercard, Trustly and Wise (formerly TransferWise).

“Formerly operating as Paytechs of Canada, the new organisation and its members play a major role in the conversations that will define the future of financial services in Canada, including payments modernisation, open banking, the digitalisation of money, and the modernisation of anti-money laundering and terrorist financing law in Canada, among others,” the association declares in the announcement of its new identity.

“Fintechs Canada will continue to break down barriers to competition and innovation in this country’s financial services industry, enabling greater choice for Canadians, as well as supporting a thriving fintech sector that progresses at pace with its global peers. But Fintechs Canada will also work with government officials to promote responsible innovation, protecting the integrity, stability and security of Canada’s financial sector,” it added.

Deputy spokesperson Caroline Thériault’s response to Fintechs Canada’s assertion of ‘slow progress’ on innovation policy in full

“Responsible innovation is a key component of a stable, trustworthy and efficient financial sector that serves the need of consumers.

“The government has a robust innovation policy agenda laid out in Canada’s Digital Charter and works closely with all stakeholders to shape its implementation. The Government of Canada is also working closely with the financial sector, including the fintech industry, to establish an open banking system in Canada, as well as working together to modernise payments technology and expand access to it.

“The financial services landscape is changing and the pandemic has accelerated a trend towards digitalisation. Modernising financial services is a key component of the Government of Canada’s growth agenda. Fintech companies, credit unions, and banks are important partners in this vision as we move from a sector that competes on scale to one that is focused on specialised products, tailored to consumer needs. This shift has the potential to lead to financial services that are more inclusive and responsive to the evolving needs of consumers and businesses. 

“Significant steps have been taken since the launch of the Department of Finance Canada’s Advisory Committee on Open Banking and in regards to the recommendations in the Advisory Committee’s final report to select an ‘open banking lead’ to work with government and industry representations to develop an open banking system. The Minister of tourism and associate minister of finance, Randy Boissonnault, named Abraham Tachjian as Canada’s open banking lead in the spring and was tasked with developing a ‘made-in-Canada’ open banking regime based on the recommendations of the Advisory Committee.

Read more: Canada unveils ‘ambitious but achievable’ open banking plan

“Mr Tachjian and the secretariat [officials from the Department of Finance] are currently engaging with industry, regulators and consumer representatives to design and implement key pillars of the open banking system, including an accreditation framework, a common set of rules and technical standards. This work is being convened through four stakeholder working groups that focus on: privacy, accreditation, security and liability. Representatives from consumer groups, regulators, fintechs, banks and credit unions participate in these groups, which meet regularly. In addition, a steering committee, which includes all members of the working groups, meet on an as-needed basis, as determined by the open banking lead, to discuss progress as well as topics outside the remit of the working groups.

“Governance and technical standards were also extensively discussed in previous consultations and in the Advisory Committee report, which provided a series of recommendations in relation to both topics. These recommendations and relevant discussions at the working groups inform our ongoing work. “The innovation agenda also includes a number of legislative proposals, including the Digital Charter Implementation Act, 2022 (also known as Bill C-27), which strengthens Canada’s private-sector privacy law and creates new rules for the responsible development and deployment of artificial intelligence (AI).

“The Government of Canada has also launched a comprehensive consultation on the future of competition policy in Canada.”

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About Ian Hall

Ian is editor of Global Government Fintech a sister publication to Global Government Forum. Ian also writes for media including City AM and #DisruptionBanking. He is former UK director for the pan-European media network Euractiv (2011-2018), editor of Public Affairs News (2007-2011) and news editor of PR Week (2000-2007). He was shortlisted for ‘Editor of the Year’ at the British Society of Magazine Editors (BSME) Awards in 2010. He began his career in Bulgaria at English-language weekly the Sofia Echo. Ian has an MA in Urban and Regional Change in Europe and a BA in Economics, both from Durham University.

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