Federal government says it will move open banking forward at ‘earliest opportunity’

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OTTAWA — The federal government says it will introduce legislation to implement open banking at its “earliest opportunity” as some advocates warn the project’s momentum may have stalled.

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Open banking — or consumer-driven banking, as Ottawa calls it — is about allowing Canadians and businesses to securely share their financial data with third parties other than their banks.

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Open banking could let Canadians with multiple accounts across different banks see their entire financial picture on one convenient dashboard. It also could help renters build their credit scores just by paying their rent on time every month.

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Other nations have implemented open banking systems and the federal Liberals passed initial legislation last year to break ground on open banking in Canada.

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But getting to that point — and keeping up the pressure to get the second half of that legislation tabled — has been “a slog,” said Fintechs Canada executive director Alex Vronces.

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“I don’t think the government at first understood really what consumer-driven banking was,” he said.

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After years of study, Ottawa got the ball rolling on open banking through the legislation to implement the 2024 federal budget roughly a year ago.

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That bill gave the Financial Consumer Agency of Canada a mandate to head up the country’s open banking framework. Legislation is still required to implement a plan to accredit service providers and set the common rules that financial institutions will have to follow.

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The Liberal government said in the 2024 fall economic statement that it’s looking at early 2026 for implementation of open banking.

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But Canada has gone through a federal election since those plans were made — and while the Liberals were returned to power with another minority government, references to consumer-driven banking were absent from the party’s election platform.

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And the government of Prime Minister Mark Carney did not table a spring budget, which it normally would use to outline its legislative priorities.

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Natacha Boudrias, leader of the National Bank of Canada’s open banking strategy, said the industry lacks “clarity” on the future shape of consumer-driven banking. She said the spring election likely stalled movement on the file.

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“We’re certainly hoping that the government is going to kick-start the effort sooner rather than later so that we don’t get stuck in a loop of consultation,” she said.

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A Finance Canada official said in a media statement that the government is still committed to consumer-driven banking.

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“The remaining elements of the consumer-driven banking framework will be introduced at the earliest opportunity, to ensure that Canadian consumers and business can securely benefit from tools that help them reduce costs and improve their financial outcomes,” the statement says.

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Instead of waiting on Ottawa, the National Bank has moved forward on its own open-banking framework that lets fintechs _ financial technology firms that develop apps for Canadians and businesses — essentially plug into their databases to share information securely when users give their permission.