Titled Building Canada Strong, Budget 2025 outlines Canada’s next phase of economic modernization, one that includes important steps to update how Canada’s financial system is regulated and supervised. The measures signal steady progress toward a more integrated, technology-enabled framework for payments, banking, and data use.

Among the key initiatives are plans to introduce legislation governing stablecoins, setting the stage for a more defined approach to digital assets and the payment service providers that use them. The government is also advancing its commitment to open, or “consumer-driven,” banking, refining the framework and shifting oversight to the Bank of Canada to streamline regulation across the financial sector.

Taken together, these and other developments reflect an ongoing effort to strengthen Canada’s financial foundations—not through sweeping change, but through deliberate steps that align with the Budget’s broader theme of building resilience and trust in a rapidly evolving economy.

What follows is an overview of the most significant financial sector measures introduced in Budget 2025.

Passing the torch: Bank of Canada takes charge of consumer-driven banking oversight

The government has committed to advancing consumer-driven banking (a.k.a. open banking) by introducing legislation to complete the Consumer-Driven Banking Act (part one of open banking legislation), which received Royal Assent in June 2024. The data-mobility right required for a consumer driven banking framework will be addressed in amendments to the Personal Information Protection and Electronic Documents Act (PIPEDA). Enshrining this data mobility right in PIPEDA will facilitate economy-wide data sharing, well beyond the banking sector.

When it was introduced, the Consumer-Driven Banking Act had provided that oversight of the open banking framework will be responsibility of the Financial Consumer Agency of Canada. In a change of course, Budget 2025 has announced that the Bank of Canada will be responsible for this oversight, building on its current oversight of payment service providers. This streamlined approach is a welcomed simplification of oversight responsibilities, which will also remove the potential compliance friction for payment service providers also wishing to participate in the open banking framework.

Although Budget 2025 provided for a commitment to extend the open banking framework to include “write access” or payment initiation by mid-2027, it does not expressly provide a specific timeline for the initial launch of the framework.

Regulating fiat-backed stablecoins: A defining moment for Canada’s digital economy

Budget 2025 marks a major milestone in Canada’s approach to digital assets, with the federal government announcing its intention to introduce legislation establishing a national framework to regulate Canadian dollar-backed stablecoins. The forthcoming legislation would require non-bank issuers to maintain adequate asset reserves, adopt redemption and risk management policies, and protect the personal information of Canadians. It would also include national security safeguards to ensure the integrity of the system and is expected to amend the Retail Payment Activities Act to capture payment service providers handling prescribed stablecoins.

Until now, stablecoins have been primarily overseen by the Canadian Securities Administrators under securities law. This was a patchwork approach that created both uncertainty for issuers, users, and financial institutions, and complexity that inhibited the launch of any regulated Canadian dollar-denominated stablecoin. Budget 2025 offers a long-awaited signal of federal leadership on this issue, though questions remain about how the new regime will interact with provincial securities rules and tax policy. With the Bank of Canada set to administer $10 million over two years to support the initiative, Ottawa’s move could set the stage for a coherent national strategy that aligns Canada with other jurisdictions, such as the United States, where the passing of the GENIUS Act is paving the way for a stablecoin framework by 2027.

Real-Time Rail and write access

Budget 2025 reaffirms the launch of Canada’s Real‑Time Rail (RTR) in 2026 and positions RTR as the backbone for the next phase of consumer‑driven banking. RTR is a new piece of national payment infrastructure that will allow Canadians to send and receive real-time, irrevocable, data-rich payments.

Two key developments in 2025 set the stage for the next phase: first, the Bank of Canada has commenced supervision of close to 1,500 payment service providers (PSPs) under the Retail Payment Activities Act framework, and second, membership eligibility for Payments Canada was expanded to allow registered PSPs to apply for direct participation in RTR. With this regulatory and operational base in place, the government will legislate “write access,” the ability for accredited third parties to initiate actions such as switching accounts or making payments, by mid‑2027, once RTR is live and in widespread use.

Anti-money laundering and financial crime

Budget 2025 proposes further changes to Canada’s AML/ATF regime, which has been a priority for the Carney government to date. To disrupt prevalent cash‑based laundering typologies, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) will be amended to restrict acceptance of third‑party cash deposits and to prohibit cash payments, donations, or deposits of $10,000 or more. Information sharing is broadened on two levels: 1) clarifications to enable public‑to‑private sharing for the new Integrated Money Laundering Intelligence Partnership (IMLIP) between banks and law enforcement, and 2) changes that make FINTRAC a member of the Financial Institutions Supervisory Committee, facilitating multi‑agency coordination on integrity risks.

The government originally tabled the cash-related changes to the PCMLTFA and public-to-private information sharing amendments in Bill C-2 in June 2025, but removed them from the streamlined version of the draft legislation, Bill C-12, in October. Bill C-12, which passed its Second Reading in the House of Commons on October 23, 2025, contains a suite of other proposed amendments to the PCMLTFA.

Ottawa will also introduce legislation by Spring 2026 to establish a dedicated Financial Crimes Agency as Canada’s lead enforcement body for complex financial crimes, including money laundering, organized criminal activity, and online financial scams. Together, these measures signal a regime that is more operational, more collaborative, and increasingly less tolerant of high‑risk practices.

National Anti-Fraud Strategy

In a pre-Budget announcement on October 20, 2025, the Carney government revealed the National Anti-Fraud Strategy, responding to sharp growth in fraud losses affecting Canadian consumers and financial industry participants. Budget 2025 commits to a whole‑of‑government National Anti‑Fraud Strategy that brings together financial institutions, technology platforms, and telecom networks in a new way to counter sophisticated, cross‑channel fraud.

Complementary Bank Act amendments will require banks to maintain policies and procedures to detect, prevent, and mitigate consumer‑targeted fraud, and to give consumers more control over their accounts: adjusting maximum transaction limits, enabling or disabling specified features, and providing express consent for those features. Banks will have to report fraud data to the Financial Consumer Agency of Canada, enabling anonymized public reporting to inform future policy.

These obligations will sit alongside other consumer‑centric initiatives that collectively raise the bar for proactive fraud prevention and rapid remediation. These include transparent pricing for international transfers, resolution requirements for misdirected payments, and reduced cheque hold periods. Institutions should expect convergence between fraud, AML, and cyber functions, with strengthened analytics, faster interdiction, and clearer redress pathways.

Harnessing AI in financial services

Budget 2025 elevates artificial intelligence from a general‑purpose technology to a strategic capability for the financial system. Two developments are especially notable:

  1. A sovereign public AI infrastructure program will expand domestic compute capacity and support secure access for public and private research, including exploration of photonics and data‑centre enablers.
  2. The government intends to work with the private sector to encourage responsible AI adoption in financial services, emphasizing innovation that builds trust.

Unlocking innovation and growth in the financial sector

Budget 2025 promotes unlocking innovation in financial services. The government will simplify and streamline the financial sector regulatory and legislative environment, with the aim of improving coordination among federal regulators, making consultations more predictable, and reducing regulatory burden to free capacity for product development and partnerships. It intends to amend the Canada Labour Code to restrict non‑compete agreements in federally regulated workplaces to boost labour mobility. Targeted frictions will be removed to support adoption of new services, including draft regulations due by spring 2026 to prohibit transfer fees for investment and registered accounts, require timely transfers, and provide clear information on processes and the absence of fees.  

The government will explore greater transparency of cross‑border transfer fees, including foreign‑exchange costs, and will work with banks to simplify switching of primary chequing accounts.  The Financial Consumer Agency of Canada has been tasked with a report on the structure, level, and transparency of bank fees. The government also proposes to amend the Bank Act so that consumers can immediately access up to $150 from a deposited cheque, regardless of whether it was deposited in person or through another method such as online or mobile banking.

Additional amendments to the Bank Act will raise the public‑float threshold to $4 billion, allowing small federally regulated financial institutions to grow larger without changing their ownership structure. Budget 2025 also focuses on easing federal entry for provincial credit unions and strengthening smaller banks’ access to brokered‑deposit distribution channels. Together with RTR, consumer‑driven banking and forthcoming stablecoin legislation, these steps form an approach intended to shorten time‑to‑market for new products and enhance flexibility for smaller financial institutions while maintaining safety and soundness.

What’s next

To learn more or discuss how these changes could support your business or policy objectives, contact one of the authors or reach out to a member of our Financial Services and Technology (FSxT) Group.