What the Dissolution of Parliament Means for Financial Institutions Legislation in Canada
October 2, 2019
On September 11, 2019, Governor General of Canada Julie Payette dissolved Parliament and called a federal general election to be held on October 21, 2019. As a result of the dissolution of Parliament, the following bills died on the Order Paper:
- Bill C-100, An Act to implement the Agreement between Canada, the United States of America and the United Mexican States (Bill C-100)
- Bill C-455, An Act to amend the Competition Act and the Bank Act (reduction of administrative burden — credit unions) (Private Member’s Bill) (Bill C-455)
- Bill C-379, An Act to amend the Bank Act (use of word “bank”, “banker” or “banking”) (Private Member’s Bill) (Bill C-379)
The outcome of the election will determine whether similar legislation to Bill C-100 or Bill C-455 will be brought before the House of Commons when the 43rd Canadian Parliament is convened. The proposed amendments to the Bank Act in Bill C-379 are redundant for the reasons discussed below.
BILL C-100: USMCA RATIFICATION
The Canada-U.S.-Mexico Agreement (commonly known as USMCA) was signed by the three party states on November 30, 2018, and the agreement was ratified by the Senate of Mexico on June 20, 2019. In Canada, Bill C-100 received its first reading by the House of Commons on May 29, 2019 and received its second reading on June 20, 2019, ahead of the House’s Summer break. Canada’s Minister of Foreign Affairs Chrystia Freeland indicated to the House of Commons that, “[w]ith respect to ratification, insofar as it is possible, we intend to move in tandem with our partners.” Despite Congress reconvening in the United States the week of September 9, 2019, it remains unclear if or when the ratification of USMCA will be brought to a vote in the United States.
If passed, Bill C-100 would have amended the federal Canada Deposit Insurance Corporation Act, the Trust and Loan Companies Act, the Bank Act and the Insurance Companies Act with parallel amendments to allow for the records and central securities register of Canadian federally regulated financial institutions currently required to be maintained in Canada to be kept outside of Canada in certain situations.
Under Bill C-100, the Office of the Superintendent of Financial Institutions (OSFI) would have required that the subject financial institutions have had immediate, direct, complete and ongoing access to such records and that such records were not required to be maintained in Canada as a matter of national security, failing either of which, OSFI would be empowered to require such records to be maintained in Canada.
Bill C-100 also proposed to eliminate the records to be maintained in Canada requirement for subsidiaries of entities incorporated in, and subject to, the regulation of the United States or Mexico as signatories to USMCA.
BILL C-455: FEDERAL CREDIT UNIONS
Bill C-455 received its first reading by the House of Commons on June 10, 2019. If passed, it would have amended the Bank Act to provide that a proposal by a member of a federal credit union to raise a matter at an annual meeting is to be signed by a minimum number of members who are entitled to vote at the meeting. It also contained amendments to the Bank Act to specify that only a federal credit union that is a distributing bank is required to provide access to its members’ register.
BILL C-379: USE OF BANK WORDS BY PROVINCIAL CREDIT UNIONS
Bill C-379 received its first reading on October 23, 2017 and contained proposed amendments to the Bank Act that would have authorized the use of the words “bank”, “banker” and “banking” by credit unions and caisses populaires that are provincially regulated. However, such authorization has already been proclaimed into force through similar amendments made to the Bank Act by the Budget Implementation Act, 2018, No. 1. As such, Bill C-379 was already redundant and its death will have no effect on provincially regulated credit unions and caisses populaires.
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