This year's Fall Economic Statement (FES 2024) arrived under highly unusual circumstances. Scheduled later than usual in the Parliamentary calendar, its release was further overshadowed by the unexpected resignation of the Minister of Finance on the very morning of its presentation. The result was an atmosphere of political uncertainty surrounding the proceedings.

While the legislation to implement the proposed changes has yet to be released, FES 2024 brought forward several notable developments in financial services regulation. This article highlights the key announcements impacting the financial services and technology sectors.

A step forward in Canada's consumer-driven banking journey

Canada's framework for consumer-driven banking was initially introduced with the 2023 Fall Economic Statement and Budget 2024. The Consumer-Driven Banking Act, part of Bill C-69, received royal assent on June 20, 2024, partially implementing the framework. Although the anticipated bill to complete the framework was not released, the Department of Finance issued "Canada's Complete Framework for Consumer-Driven Banking" with FES 2024, providing a more comprehensive view.

Among other developments, this framework highlights a vision for governance that would see:

  • cooperation between the federal government and the provinces;
  • a phased prohibition on screen scraping; and
  • an added focus on national security, among other developments.

Click here to read a summary of the net new elements of the framework.

Ottawa aims to launch the consumer-driven banking framework in early 2026. However, the accompanying bill is still pending, and many details will likely be addressed in future regulations. With an election on the horizon, it remains uncertain if open banking will be realized by 2026.

New measures to combat financial crime

With Canada set to begin its next mutual evaluation by the Financial Action task Force in 2025-26, Ottawa continues to strengthen the country's response to financial crime. The changes announced in FES 2024 are set against the backdrop of a consultation on regulatory amendments to Canada's primary anti-money laundering/anti-terrorist financing legislation, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

FES 2024 announced numerous changes to this legislative framework, with expanded tools for Canada's financial intelligence unit and anti-money laundering and anti-terrorist financing supervisor, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). Notably, these include increased fines and penalties for breaches of legislative requirements and for criminal offences.

Click here to explore these announcements in greater detail.

Changes for lenders

FES 2024 introduced significant changes for lenders, targeting payday loans, mortgage stress tests, and fraud. These measures aim to enhance borrower protections, streamline mortgage rules, and strengthen the financial system:

  • Criminal interest rate and payday lending: The government would amend the criminal interest rate prohibition under the Criminal Code—particularly the payday lending exemption—to:
    • require a minimum term of 42 days and repayment in installments; and
    • prohibit credit insurance charges on payday loans.
  • Mortgage lending: The government will initiate consultations to enhance the structure and effectiveness of the stress test on insured mortgages. Additionally, Ottawa will amend mortgage insurance rules to eliminate the stress test requirement for uninsured mortgage holders who switch from a federally regulated lender to one that buys portfolio insurance for the mortgage. The Department of Finance has published a technical backgrounder detailing this measure, which is now in effect.

    In addition, the Canada Revenue Agency will engage with the broader financial sector, including mortgage lenders, for feedback on designing and implementing a new tool to combat mortgage fraud.

Fueling innovation

FES 2024 promises a boost for innovators and businesses, with changes to pension investment rules, increased SR&ED support, and targeted funding to accelerate digital adoption. These measures aim to drive growth, innovation, and productivity across Canada's economy.

  • Pension investment in Canadian entities: The government plans to amend regulations, removing the 30 per cent rule for investments in Canadian entities by Canadian pension funds. This and related changes would encourage Canadian pension funds to increase their ownership share in Canadian entities. Additionally, the government is consulting on regulations to enhance public transparency of pension investments for large federally regulated plans.
  • Scientific Research and Experimental Development (SR&ED) program: The SR&ED tax incentive program would be enhanced with a $1.1 billion boost that would encourage Canadian businesses to invest in innovation and drive growth. The changes would also encourage businesses purchase and implement productivity-enhancing technology for eligible SR&ED projects.
  • Digital acceleration for small businesses: The Business Development Bank of Canada would receive up to $500 million over four years to provide financing and support to small and medium-sized businesses to help them adopt digital technologies, particularly artificial intelligence (AI).

Accelerating Canada's AI advantage

FES 2024 lays out ambitious plans to position Canada as a global AI leader, with major investments in AI infrastructure and targeted funding to support research, innovation, and growth. These investments aim to fuel AI development and remove barriers to scale.

  • AI infrastructure: FES 2024 announces a $15-billion program to support AI data centre projects, leveraging Canadian pension funds to accelerate development and boost Canada's AI advantage. The government will also collaborate with various stakeholders in an effort to remove regulatory barriers to growth for Canada's AI infrastructure.
  • AI strategy: Building upon announcements in Budget 2024, FES 2024 introduces the Canadian Sovereign AI Compute Strategy, which will provide funding to support Canadian AI researchers and firms. This includes $300 million over three years for an AI Compute Access Fund, $700 million create Canadian AI anchor firm "Champions," and $800 million for large-scale public compute infrastructure, among other targeted investments.

Strengthening financial services

FES 2024 introduced several targeted changes for Canada's financial services sector, including measures to address frozen Russian assets, reduce credit card fees for small businesses, and harmonize financial rules across the country—all with a view to enhancing fairness, transparency, and economic growth.

  • Financial institutions holding frozen Russian assets: FES 2024 announced a Canadian version of the European Union's windfall profit mechanism in amendments to the Special Economic Measures Act. These changes would permit the government to levy a targeted charge against the windfall profits generated on frozen assets held in financial institutions in Canada.
  • Small business credit card fees: Ottawa is considering introducing legislation that would require payment processors to pass credit card transaction fee savings on to small businesses.
  • Cross-Canada provision of financial services: The government is collaborating with the provinces and territories to integrate financial services rules into the Canadian Free Trade Agreement, facilitating the free flow of financial services and promoting regulatory cooperation to support economic growth in the financial services sector.

Got questions? We've got answers! Reach out to our Financial Services & Technology (FSxT), Financial Services Regulation, or White Collar Defence and Investigations groups for advice on how these changes may affect your business.