Canada’s government has unveiled major updates to its open banking framework in Budget 2025, shifting oversight of the Consumer-Driven Banking Act to the Bank of Canada. This move, announced on November 4, 2025, aims to boost financial innovation, enhance security, and give consumers more control over their data while building on the central bank’s role in payments.
Background on Canada’s Open Banking Journey
Canada has trailed behind countries like the UK and Australia in rolling out open banking, which lets people share their financial data securely with third parties through APIs. The push started years ago, with a 2020 report suggesting a launch by early 2023, but delays have kept it in planning stages until now.
Budget 2024 laid some groundwork by expanding the Financial Consumer Agency of Canada’s mandate, but progress stalled. Now, with Mark Carney as prime minister after his April 2025 election, the focus has sharpened on making the system live. Open banking promises better financial tools, like apps that help build credit from rent payments or compare loan options easily.
Experts say this could help lower-income families most by offering cheaper products and debt management aids. The framework ties into broader goals, including the Real-Time Rail system for instant payments set for 2026.
Key Announcements in Budget 2025
The budget, titled “Canada Strong,” dedicates sections to innovation and competition in finance. It commits to completing the Consumer-Driven Banking Act with new laws on accreditation, security, liability, and consent.
One big change is adding rules for small and medium businesses, plus emphasizing competition as a core goal. The government plans to spend millions on national security, including funds for intelligence services to safeguard data sharing.
Here are some standout features from the budget:
- Stronger data mobility rights under privacy laws to enable wide sharing.
- Focus on reducing risks from current data practices.
- Support for fintech growth through easier accreditation.
A table below outlines funding highlights:
| Item | Amount (CN$) | Purpose | Timeframe |
|---|---|---|---|
| Bank of Canada Oversight | Up to 19.3 million | Implementation support | Over two years |
| National Security | 25.7 million | Safeguards in the Act | Over five years starting 2025-26 |
| Ongoing Security | 5 million annually | Long-term protections | From 2025 onward |
This funding shift saves about 36.9 million previously set for another agency.
The budget also touches on regulating stablecoins, requiring issuers to hold reserves and manage risks, which fits into the open banking push for a safer digital economy.
Why Shift Oversight to the Bank of Canada?
The decision to hand oversight to the Bank of Canada marks a pivot from plans to use the Financial Consumer Agency. Officials say this builds on the bank’s experience with payment providers, making it a natural fit for handling open banking rules.
Mark Carney, a former Bank of Canada governor, likely influenced this choice. It could speed up approvals for fintech firms, as the central bank might streamline processes better than a consumer-focused body.
This aligns with global trends where central banks oversee digital finance to ensure stability. For example, recent U.S. moves on data sharing have involved federal regulators, showing a pattern of central involvement.
Public reactions vary. Some online discussions praise it for innovation, while others worry about privacy or links to digital IDs. Still, the shift aims to foster trust through robust standards.
Benefits for Consumers and Businesses
Open banking could transform how Canadians handle money. People might switch banks easily, pay bills faster, or get personalized advice without sharing passwords.
For businesses, especially small ones, it means better access to services like quick loans based on real-time data. Lower barriers could spark competition, potentially cutting fees that big banks charge.
Financial experts predict this will boost inclusion. Lower-income groups often face high costs; open banking tools could help them track spending or find deals.
In related news, Canada’s economy has shown resilience in 2025, with inflation steady and tech investments rising. This budget ties into that by promoting a “competitive and innovative” financial system.
Timeline and Next Steps
The government targets full rollout soon. Key milestones include final legislation in 2025 and “write access” features by mid-2027, once Real-Time Rail launches.
Write access lets users direct actions like account switches directly through apps. The budget reaffirms Real-Time Rail’s 2026 debut for real-time, data-rich payments.
Planning includes public consultations and standards development. Officials aim for a phased approach to avoid glitches seen in other countries’ launches.
Potential Challenges Ahead
Not everything is smooth. Critics point to past delays and question if the timeline is realistic. Security risks, like data breaches, remain a concern despite new safeguards.
Fintech leaders welcome the changes but call for clear rules on data charges. Globally, similar systems have faced pushback from banks over sharing revenue.
Canada’s approach must balance innovation with protection. Recent cyber threats in finance highlight the need for strong oversight, which the Bank of Canada is positioned to provide.
As this develops, it could reshape banking for millions. Share your thoughts on how open banking might change your finances, and follow for updates on implementation.
