Fintechs Canada asks government to provide extra funding to FCAC in Budget 2025

Fintechs Canada has asked the government to ensure the country’s real-time payment system is “built on a timely basis”, as well as to commit further funding to the Financial Consumer Agency of Canada (FCAC) for consumer-driven banking, in the next federal budget.

The not-for-profit association, which acts as the unified voice for fintech companies in Canada, made the recommendations in its written submission for the pre-Budget consultations in advance of the upcoming federal budget.

“The government should continue to support the development of Payments Canada’s real-time payment system and ensure it is built on a timely basis and in accordance with existing policy objectives,” Fintechs Canada stated.

Canada is now the only G7 country without a real-time payment system, following the launch of FedNow in the US last year.

In its submission, Fintechs Canada pointed to the “many setbacks and delays” faced by Real-Time Rail (RTR) in Canada, which was initially planned to launch in 2019, and was then postponed to 2022 and then 2023.

In April this year, Payments Canada announced the final part of the build of RTR had resumed with new partners IBM Canada and CGI, along with Interac.

It intends to initiate testing of the new system through 2025 and into industry testing in 2026.

However, Fintechs Canada stated that “no specific timeline has been provided for the nationwide launch” of RTR.

It has called for the government to closely monitor Payments Canada’s timelines, “holding them accountable for any future delays”.

The association’s second recommendation is that the government continue to support the development of Canada’s Open Banking framework “by providing the FCAC with additional funds in Budget 2025, if not sooner”.

It has suggested the FCAC be provided with additional funds of $5 million per annum that “extend well beyond the launch of the framework”, which would be used “to strengthen the financial literacy of Canadians”.

In Budget 2024, Deputy Prime Minister and Minister of Finance Chrystia Freeland announced legislation that will expand the mandate of the FCAC to include oversight, administration and enforcement of consumer-driven banking and confirmed an initial allocation of $1 million in funding.

At Open Banking Expo Canada on June 11, Kirsten Fraser, director, financial services innovation at Finance Canada, told delegates that the amounts pledged in the budget were “not intended to be the extent of what the FCAC will receive for administration and oversight of the Act”.

Last year, research by the FCAC revealed that consumer interest in Open Banking is low, with 52% of Canadians saying they would not participate in an Open Banking system after hearing a definition, while only 9% had heard of Open Banking.

Fintechs Canada wrote in its submission: “Given the lack of awareness of Open Banking in Canada and the increasing number of Canadians sharing their financial data, it is essential for consumers and businesses to be informed about the protections in place when sharing financial information with accredited participants.”

Last week, FDATA North America also called for “sufficient” funding for FCAC in its written submission ahead of the next federal budget.