Ottawa tabled a second consultation paper on Aug. 11 to begin the next stage of the process aimed at renewing federal legislation governing the financial sector.
In the paper, entitled Potential Policy Measures to Support a Strong and Growing Economy: Positioning Canada’s Financial Sector for the Future, the Department of Finance compiled observations and recommendations from a wide range of stakeholders, which were obtained during the first stage of the process launched on August 26, 2016.
For the second stage, the department aims to gather views on whether and how to implement potential policy measures. It also advised that consultations on potential policy measures could lead to legislation being studied in Parliament before the statutory deadline of March 29, 2019.
Investment in infrastructure
Among the potential policy measures that may be included in the 2019 legislation update, some pertain to the insurance and financial services sector.
As part of the modernization of the legislative framework, the department is seeking views as to whether to give federally regulated life and health insurance corporations greater powers to invest in infrastructure. The department is also seeking advice on the conditions that should apply to additional powers to protect policyholders and to maintain the limits on commercial investments that have been in place for many years.
Women's participation on boards of directors
Furthermore, in terms of representativeness, the department is seeking advice on whether to implement a "comply or explain" model in order to promote the participation of women on the boards of directors and senior management of federally regulated financial institutions.
The department also wishes to know whether annual elections for directors with fixed terms of one year should be held in all federally regulated financial institutions.
Use of the term "bank"
The department is also seeking advice on whether to permit non-bank deposit-taking institutions regulated by prudential standards to use the terms "bank" or "banking" to describe their activities and services in appropriate circumstances. The department invites feedback on how to limit the use of these terms, prevent market confusion and adequately protect consumers.
With respect to financial technology, some measures could clarify the fintech powers of financial institutions or facilitate collaboration between financial institutions and financial technology companies (fintechs).
As part of the consultation, the department will seek advice on possible improvements to the resolution framework for life insurance companies in the event of an insurer's bankruptcy.
Advanced cybersecurity strategy
The Department of Finance is also seeking feedback on cybersecurity matters, in particular, with respect to developing a new, sustainable, cyber security strategy that is responsive to an evolving cyber security environment. It is aiming to make Canada a world leader in the promotion of advanced cybersecurity technology and the use of this technology to promote safe and secure services to the global marketplace.
At the same time, the department will step up its cyber security collaboration within the G7 and G20 in order to increase awareness and developing common initiatives to improve cyber-resilience.