On November 5, 2026, Finance Minister François-Philippe Champagne tabled the 2026 federal budget, Masters of Our Destiny (Budget 2026). Sovereignty is Budget 2026 organizing theme, reflected in its focus on building Canada’s economic strength, empowering entrepreneurs to grow, turning ideas into companies, and delivering more choice and lower costs for consumers.

Heading into Budget day, the asks for financial services and technology were familiar: launch open banking, get the Real-Time Rail running, narrow the proposed ban on stablecoin rewards and make it easier overall for challengers to compete with the incumbents.

For businesses, the message is mixed: Ottawa is pressing ahead on payments, competition and financial crime, but consumer-driven banking still has no launch date and the stablecoin yield restrictions remain unchanged. Below, our Financial Services and Technology (FSxT) Group sets out what Budget 2026 means for your business and what to watch for next.

At a glance

Topic

Summary

Consumer-driven banking

No new updates but Budget 2026 provided for complementary measures that will advance consumer-driven banking.

Real-Time Rail

Budget 2026 announces the launch the next phase of Canada’s payments modernization, guided by a public consultation expected in early 2027 on future priorities and the statutory review of the Canadian Payments Act.

Digital credentials

Intention to develop a pilot project for the use of voluntary digital credentials in financial services to support innovation and help combat identity fraud.

Payments

Targeted amendments will be made to the RPAA to strengthen the Bank of Canada’s oversight of payment service providers.

Commitment to work with provinces and territories to develop harmonized consumer protection requirements for payment service providers regulated under the RPAA.

Stablecoins

Proposed amendments requiring federally regulated financial institutions to issue stablecoins through subsidiaries governed by the Stablecoin Act, while clarifying the treatment of foreign issuers and exploring additional insolvency protections.

Competition in the financial sector

OSFI would add a secondary competition objective, new entrant applications would get a one-year decision timeline, challenger banks and federal credit unions would gain greater ownership flexibility, and the deposit insurance limit would rise to $250,000.

Financial crime and fraud

The Financial Crimes Agency is set to launch in fall 2027. AML/ATF supervision of federally regulated financial institutions will be transferred from FINTRAC to OSFI. A legislated Multi-Sector Anti-Fraud Framework is set to be introduced, with consultation on draft legislation in 2027.

Access to Capital

Capital gains relief delivered, but financial-sector businesses are excluded; new C$25 billion Canada Strong Fund to make strategic investments and co-invest alongside private investors; and BDC and EDC to be combined into a more risk-tolerant development bank, with BDC implementing Ottawa’s previously announced Early and Growth Stage Investment Strategy.

Consumer-Driven Banking: No timeline yet, but the groundwork continues

Despite numerous references to consumer-driven banking, Budget 2026 did not announce any substantive updates or provide a timeline for the launch of the framework.  However, it outlined complementary measures that would support its implementation, including developments relating to the Real Time Rail (RTR) and digital credentials, as discussed below.

Notably, Budget 2026 signals an expansion of data portability beyond financial services to the telecommunications and air transportation sectors.

Real-Time-Rail: Its imminent launch is just the beginning

Budget 2026 confirms that the RTR will launch on November 9, 2026, enabling individuals and businesses to send and receive data-rich payments instantly, with immediate access to funds. The launch caps a period of significant reform, including the new regulatory framework for payment service providers under the Retail Payment Activities Act (RPAA) and expanded access to Payments Canada’s systems, with fintechs joining Payments Canada membership throughout this year. 

With payment and settlement systems now recognized as a core strategic and sovereign capability for Canada, the RTR is also the first step in operationalizing the government’s sovereignty objectives and the foundation for connecting Canada to new markets, including through the commitment announced at the Canada-EU Summit to work towards linking the RTR with Europe’s instant payment systems.

Looking beyond the launch, the government intends to begin the next phase of payments modernization, guided by a public consultation expected in early 2027 on future priorities and the statutory review of the Canadian Payments Act. 

Digital credentials: Starting to close a long-standing gap

A digital identity framework had long been recognized as a missing piece in the successful implementation of consumer-driven banking in Canada. Budget 2026 signals progress in this front, announcing plans to develop a pilot project for the use of voluntary digital credentials in financial services to support innovation and help combat identity fraud. This is a welcome development and an important step toward addressing a long-standing gap in Canada’s digital financial services infrastructure.

Payments: Stronger oversight and a national consumer protection standard

As part of the next phase of payments modernization, Budget 2026 proposes targeted amendments to the RPAA to support the Bank of Canada’s effective supervision of payment service providers and its administration of the Act. Budget 2026 does not reveal the specific amendments, but it signals that, with the retail payments regime now up and running, the government is prepared to refine the framework in light of the Bank’s early supervisory experience.

Significantly, it also announces Ottawa’s intention to work with provinces and territories to develop harmonized consumer protection requirements for payment service providers regulated under the RPAA. This is a potentially important development for the payments industry, and it remains to be seen how this will affect the fragmented patchwork of provincial consumer protection requirements. Greater harmonization could substantially reduce regulatory complexity and compliance costs for payment service providers operating across Canada, while promoting a more consistent level of consumer protection nationwide.

Stablecoins: Clarity for federally regulated financial institution and foreign issuers 

Budget 2026 proposes targeted amendments to Canada's Stablecoin Act and federal financial institution legislation to clarify the regulatory treatment of stablecoin issuance by domestic and foreign financial institutions. The Stablecoin Act received Royal Assent in March 2026 but has not yet come into force. Proposed Stablecoin Regulations were published on October 24, 2026, with comments due by December 23, 2026, and implementation targeted for fall 2027.

Budget 2026 proposes to amend the Bank Act, Trust and Loan Companies Act and Insurance Companies Act to prohibit federally regulated financial institutions from issuing stablecoins directly. Instead, these institutions would be required to issue stablecoins through non-financial institution subsidiaries regulated under the Stablecoin Act. Budget 2026 also proposes amendments to the Stablecoin Act to extend its application to certain foreign financial institutions that are not subject to prudential regulation in Canada. Related amendments would clarify that stablecoin issuance does not, in itself, constitute engaging in the business of accepting deposits for foreign banks and their affiliated entities regulated under Part XII of the Bank Act. Together, these measures are intended to promote consistent regulatory treatment across domestic and foreign financial institutions and non-bank stablecoin issuers alike.

Since the enactment of the Stablecoin Act, Canadian banks have faced uncertainty regarding their ability to issue stablecoins, particularly in the absence of targeted OSFI guidance. Budget 2026 provides a clearer legislative pathway for bank-affiliated stablecoin issuance through regulated subsidiaries, which will need to be structured to accommodate applicable prudential and supervisory requirement implemented through OSFI's adoption of the Basel SCO60 framework for cryptoasset exposures. For foreign issuers, the proposed amendments provide greater regulatory clarity, although differences between Canada's framework and international regulatory regimes may continue to present cross-border compliance challenges. 

Competition: Building room for the financial sector to grow

Budget 2026 presents competition as central to its financial sector agenda, building on existing reforms such as consumer-driven banking and payments to facilitate market entry, help firms scale, and modernize regulatory and supervisory frameworks. 

To attract new entrants and help them grow, Budget 2026 proposes amendments to the Bank Act, Trust and Loan Companies Act and Insurance Companies Act to set a one-year timeline for decisions on new entrant applications. To encourage mid-sized challenger banks, foreign bank subsidiaries with less than C$8 billion in equity would be exempt from the public holding requirement where their foreign parent is widely held and listed on a recognized foreign exchange, and the threshold at which banks must become widely held would rise from C$12 billion to C$25 billion in equity. 

Deposit-taking institutions would also gain more flexibility to transfer assets and liabilities to other institutions, making it easier for solvent but troubled institutions to pursue private market solutions. The Minister of Finance will issue a policy statement on how ministerial tools may support new entrants, including credit union continuance, and further Bank Act amendments would give qualifying cooperative shareholders more flexibility to invest in and control federal credit unions.

OSFI: A broader mandate from competition to AML

As a notable part of its competition strategy, the government intends to amend the Office of the Superintendent of Financial Institutions Act to give OSFI a secondary competition mandate, so that proportionality, compliance burden and market impacts are reflected more clearly and consistently in how federally regulated financial institutions are regulated and supervised. This sits alongside a new Cabinet Directive on Regulatory Competitiveness and Red Tape Reduction, under which new regulations and the broader regulatory system will be examined through a competitiveness, growth and investment lens.

The most significant supervisory change is the proposed transfer of AML/ATF supervision of federally regulated financial institutions from the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) to OSFI, through amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and the Office of the Superintendent of Financial Institutions Act, to enhance supervision and compliance of the largest financial institutions.

Financial crime: Building investigation and enforcement capacity

Budget 2026 shows Canada building out a financial crime-fighting ecosystem that goes well beyond its traditional emphasis on reporting. The focus has shifted decisively toward investigation and enforcement. It builds on recent legislative activity on financial crime: 

  • Bill C-29 to stand up the Financial Crimes Agency as Canada’s new lead enforcement agency, with operations beginning in fall 2027
  • Bill C-12 to strengthen AML/ATF supervision, compliance and enforcement
  • Bill S-8 to protect money services businesses from illicit activity and address common types of cash-based money laundering

Building on Canada’s recent mutual evaluation by the Financial Action Task Force, the government intends to expand FINTRAC’s ability to share information with OSFI, clarify FINTRAC’s powers of examination, expand FINTRAC’s ability to obtain supervisory information from regulated entities, and extend AML/ATF requirements to higher-risk gambling activities and the registration regime to dealers in precious metals and stones. Separately, the Minister of Finance would gain authority under the Bank Act to order banks to divest investments in Canadian businesses where national security concerns emerge.

To make it harder to hide behind corporations, amendments to the Canada Business Corporations Act, the Canada Not-for-profit Corporations Act and the Canada Cooperatives Act would give more authorities access to non-public beneficial ownership registry information and give the government stronger powers to dissolve corporations used for fraudulent purposes. Legislation is also promised to strengthen investigative tools targeting organized crime, modernize Criminal Code financial crime offences and penalties, and facilitate the recovery of proceeds of crime. 

Canada’s National Anti-Fraud Strategy: Legislative framework and multi-sector collaboration

Alongside Budget 2026, the Department of Finance released a Policy Statement on Canada’s National Anti-Fraud Strategy. Its cornerstone is a new Multi-Sector Anti-Fraud Framework, to be established by legislation, that will impose common anti-fraud obligations on banks, telecommunications service providers and digital platforms, including social media, with sector-specific rules to follow. 

In-scope organizations will need to prevent, detect, disrupt and respond to fraud, including through staff training, detection capabilities, information sharing and suspending fraudulent users. They will also be required to provide redress where fraud losses result directly from their non-compliance, and join a single external complaints body designated by the Minister of Finance. Sector regulators will be able to impose fines and penalties. 

The Framework will be supported by amendments to

  • the Bank Act to cap consumer liability for unauthorized transactions at $0 across all account types held with a bank, absent gross negligence (or gross fault in Québec);
  • to the Telecommunications Act to give the CRTC authority to impose fraud prevention obligations on telecommunications service providers and to collect and publish information on fraudulent telecommunications; and
  • to Canada’s Anti-Spam Legislation to allow the CRTC to proactively disclose information to law enforcement and national security organizations. Consultation on draft legislation is expected in 2027, with the final legislation to be introduced before the end of that year.

The key questions will be how consistently sector regulators enforce the common rules, and whether the sector-specific obligations, which the government says will reflect each sector’s operational realities, are practical to implement, particularly given that the redress model will require organizations to coordinate on complaints that span multiple sectors.

Access to Capital: Ottawa becomes a co-investor, but fintechs may be left out of capital gains relief 

Budget 2026 makes growth capital a theme, acknowledging that too many Canadian startups struggle to raise it. The capital gains relief that venture and innovation groups asked for arrives through the new Canada Growth Incentive, which is designed to make equity in Canadian startups more attractive to founders, early employees and investors. Fintechs should note, however, that businesses operating in the financial and insurance sectors are excluded, so some may not qualify.

Through its C$25 billion Canada Strong Fund, Canada’s first sovereign wealth fund, Ottawa will take minority stakes in Canadian projects and high-growth companies on the same commercial terms as private investors. It will do so in two ways: by co-investing in projects where Ottawa is already providing support, and by making selective strategic investments in high-potential projects offering long-term returns. 

Ottawa’s recent equity commitment in Cohere shows the kind of deal to expect. From 2027, Canadians will also be able to invest alongside the Fund through Canada Strong Notes, a principal-protected product sold through participating financial institutions. Companies receiving federal support should expect the Canada Strong Fund to ask for a minority stake on the same terms as private investors and should plan for that when negotiating financing and investor rights.

Ottawa is also reshaping how it lends and invests. BDC and Export Development Canada (EDC) will be combined into a single development bank. Ottawa expects the new bank, like its other financing Crown corporations, to have a greater risk tolerance than private sector lenders, so that public financing complements, rather than simply replicates, what private capital markets already offer. Separately, BDC will deliver the Early and Growth Stage Investment Strategy, first announced in Budget 2025, with up to C$750 million in venture investment: C$75 million for pre-seed and seed investment and C$675 million for later and growth-stage investment. A combined BDC and EDC with a bigger appetite for risk could mean more public capital for growth companies but expect changes to programs and contacts along the way.

Other developments to note: 

  • Deposit insurance: The government intends to modernize the deposit insurance framework under the Canada Deposit Insurance Corporation Act, including by increasing the deposit insurance limit to C$250,000, providing temporary high-balance coverage for certain life events such as the sale of a home, and removing the limit for eligible deposits in registered and tax-free accounts.
  • Funding for smaller deposit-takers: The government will work with small- and medium-sized deposit-taking institutions to better understand their funding needs and explore options to strengthen access to stable, cost-effective funding that supports growth, competition and innovation.
  • OSFI penalties: Following a review of fines and penalties launched after Budget 2025, the government intends to amend the Office of the Superintendent of Financial Institutions Act to increase the maximum administrative monetary penalties for both individuals and institutions.
  • FCAC penalties: The Financial Consumer Agency of Canada Act would be amended to clarify that the current maximum administrative monetary penalty applies to conduct that began before that maximum came into force but continued afterward.
  • Annual bank fee statements: The government intends to develop regulations requiring banks to provide consumers with a single, clear annual statement of the fees paid on their chequing and savings accounts, as is already the case in the European Union and the United Kingdom.
  • Credit card payment allocation: The government intends to consult on legislative amendments requiring credit card payments above the minimum amount to be applied first to balances carrying the highest interest rate, as is currently the practice in Québec.
  • Payday loans: The government intends to amend the payday lending exemption in section 347.1 of the Criminal Code to extend the minimum repayment period for payday loans to 42 days, require repayment in instalments and prohibit credit insurance charges on payday loans.

Looking ahead

Budget 2026 puts economic sovereignty, including greater competition, choice and lower costs for Canadians, at the centre of Ottawa’s agenda for financial services and technology. It also sets the agenda for an active year of consultations and legislative development in 2027, as many of the measures discussed above take shape in draft legislation, regulations and guidance. 

Our Financial Services & Technology (FSxT) Group continues to monitor these developments closely. Contact the authors to discuss what Budget 2026 means for your business and how to prepare for the changes ahead.