Regardless of the outcome of next week's federal election, Canada's next government will inherit a complex and evolving financial landscape—one shaped by years of dialogue, shifting international standards, and growing demands for modernization. From unlocking the promise of open banking and tackling financial crime, to removing trade barriers and clarifying crypto policy, key areas of economic and regulatory reform are poised to define the nation's competitiveness and credibility.

Below we outline the pressing policy questions facing Canada's next government—and the opportunities they present to build a stronger, more agile financial future.

Carrying the torch on consumer-driven banking

Discussions on open banking (also known as consumer-driven banking) in Canada began in 2018 and have continued over the past seven years. Despite the absence of a comprehensive legislative framework, the first of a two-part legislative package received royal assent in June 2024. A complete implementation framework followed in December. The next step is critical: part two of the legislation, along with accompanying regulations, is needed to bring open banking to life.

All political parties have previously indicated support for open banking, and we expect this to be a priority area for the new government. A Liberal government will build on the progress made so far, introducing part two of the legislation and related regulations. A Conservative government, by contrast, would be expected to propose an entirely new legislation.

Turning pressure into progress on financial crime reform

Canada is facing significant pressure from the United States over its perceived lack of enforcement on fentanyl importation and related money laundering schemes. Indeed, a 2016 review of Canada's anti-money laundering (AML) and anti-terrorist financing (ATF) regime, the Financial Action Task Force (FATF), the international AMLT/ATF watchdog, criticized Canada for lacking the resources and expertise to pursue complex money laundering cases. The FATF will review Canada's AML/ATF measures again this year, making this a critical—and time-sensitive—issue for the next government.

The good news? Canada already has some key building blocks in place, including recent legislative and regulatory changes. The 2022 federal budget proposed the creation of a new body, the Canadian Financial Crimes Agency (CFCA), to tackle complex money laundering, sanctions evasion, and terrorist financing crimes. The CFCA would also review Canada's anti-money laundering regime to identify gaps that limit Canada's effectiveness. Work has begun on the structure of the CFCA framework, and it's fair to assume that re-assessing the recommendations made to date will be an early priority for the new government.

Unlocking the upsides of interprovincial trade

Although barriers to interprovincial trade have been discussed for decades, Canada has finally made this issue a priority in response to ongoing trade tensions. Initial efforts have focused on easing the movement of goods across provincial borders—but for Canada's financial services sector, the bigger opportunity lies in streamlining the complex regulatory landscape that governs the delivery of financial products and services.

Ottawa's goal is to boost growth and innovation for Canadian businesses, which often face challenges complying with 13 different regimes. A new government could explore means to establish common rules and procedures that could standardize things like consumer protection and the distribution of financial products and services across Canada. For financial institutions and other financial service providers that require provincial licenses and registrations, a new government will likely explore establishing reciprocal recognition of regulated businesses. This initiative will require active involvement from Canadian businesses, industry groups, and provincial and territorial leaders, working together with the federal government.

Strengthening Canada's position in the global digital economy

Political support for the blockchain, crypto and digital asset sector is gaining momentum around the world. Leading financial hubs are rolling out national strategies, bespoke legislation and dedicated regulatory frameworks to support growth. As the international landscape evolves, will Canada be sidelined, or can the next administration seize the opportunity to position Canada for success in the global digital economy?

A defining moment for Canada's financial future

As Canada stands at the threshold of a new federal mandate, the path forward is filled with both challenges and opportunity. What's clear is that financial modernization is no longer optional—it's essential and Canada must move decisively to create a more agile, secure, and competitive financial environment. Doing so will require political will, regulatory clarity, and strong collaboration between government, industry, and provincial partners.

Whether you're navigating open banking implementation, managing cross-border compliance, responding to financial crime risks, or exploring digital asset strategies, our multidisciplinary FSxT Group is here to help. Reach out today learn how we can support your next move.