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AML & Financial Services Regulatory

Canada: Stepping into the digital financial future – the Federal Government tables the new Consumer-Driven Banking Act

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In brief

On 18 November 2025, the Federal government tabled Bill C-15, called “An Act to implement certain provisions of the budget tabled in Parliament on 4 November 2025” (“Budget Implementation Act“), an omnibus piece of legislation striving to implement many of the objectives previously set out in the 2025 Federal Budget. Within the Budget Implementation Act, the government introduces the Consumer-Driven Banking Act (CDBA), a long-anticipated legislative framework for open banking in Canada.

The CDBA establishes a federal regime that empowers consumers to securely direct the sharing of their financial data among federally regulated financial institutions, other regulated credit unions and financial institutions, registered payment service providers under the Retail Payment Activities Act, and other accredited entities, each of which is referred to as a “participating entity” under the CDBA. After years of consultation this marks a pivotal step toward modernizing Canada’s financial sector.

Key takeaways

The Budget Implementation Act (Bill C-15) marks a significant milestone in Canada’s journey toward open banking and consumer data mobility. The CDBA is designed to empower consumers, including businesses, to control how their financial data is shared among “participating entities.” The CDBA aims to ensure that data sharing is secure, transparent, and fosters competition and innovation in Canada’s financial services landscape.

The key takeaways of the CDBA are:

Regime and supervisory authority

  • The CDBA names the Bank of Canada (BoC) as the primary supervisory authority. The BoC is responsible for accrediting participating entities, overseeing compliance, and monitoring market trends. The Minister of Finance retains broad powers to issue guidelines and intervene for reasons of national security or public interest.

Scope of application

  • The CDBA applies to data related to deposit accounts, investment accounts, payment products, credit products, and other regulated financial services. It covers federally regulated financial institutions, other regulated credit unions and financial institutions, registered payment service providers under the Retail Payment Activities Act and other accredited entities, together referred to as “participating entities” under the CDBA.

Accreditation and registration

  • Entities wishing to become accredited participants must apply for accreditation, demonstrating compliance with technical standards and security safeguards. Accredited entities will be required to pay an annual fee and be listed in a public registry maintained by the BoC.

Consumer rights and data sharing

  • Consumers can direct participating entities to share their financial data with other participants of their choice. The CDBA mandates express consent, clear communication, and the ability for consumers to withdraw consent or request deletion of their data at any time.

Security and liability

  • Participating entities must implement robust security safeguards, report breaches, and notify affected consumers if there is a real risk of significant harm. The CDBA limits consumer liability for unauthorized access unless there is gross negligence.

Complaints and redress

  • The CDBA requires all participating entities to establish internal complaints procedures and to be members of a designated external complaints body, ensuring accessible and impartial dispute resolution.

Enforcement and penalties

  • The BoC is empowered to conduct audits, issue compliance agreements, and impose administrative monetary penalties for violations, with the maximum penalty for a violation committed by an individual being CAD 1,000,000 and CAD 10,000,000 where the violation was committed by a participating entity or accredited third-party service provider. The CDBA also provides for more serious court-enforced offences, which can lead to a fine of not more than CAD 1,000,000 and/or imprisonment for a term of not more than five years or in the case of an entity, to a fine of not more than CAD 5,000,000 for a conviction or conviction upon indictment.

Going forward

The consumer-driven banking regime is intended to create a secure system that allows individuals and businesses to share their financial data with participating entities and approved service providers of their choice. The CDBA also aims to foster innovation and competition in the financial sector.

The CDBA represents a foundational step toward open banking in Canada. While the government has set a target for launching the open banking framework in early 2026, much will depend on the passage of supporting regulations. Under the CDBA, participating entities will need to double their efforts in protecting consumer financial information as well as implementing a robust process for dealing with consumer complaints.

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Tiana Gleason, Articling Student, has contributed to this legal update.

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Author

Michael serves as the head of the Financial Services Regulatory Practice for Canada and is a Transactional Partner in Baker McKenzie's Toronto office. His practice focuses on financial regulation and compliance for fintechs, financial institutions and market participants and their business in Canada. When not acting for clients, Michael lectures students at the University of Montreal on corporate and securities laws and in preparing for case competitions. He is a co-author of the Annotated Bank Act (2023 edition) and the Jurisclasseur en valeurs mobilieres, a leading publication on securities laws. Michael is a chartered professional accountant and has worked as an inspector with the Autorité des marches financiers (AMF) and an auditor with the Office of the Auditor General of Canada.

Author

Usman Sheikh is Chair of the Blockchain & Fintech Practice. He is a Transactional Partner in Baker McKenzie's Toronto office and is also a member of the Firm's Litigation and Government Enforcement Practice Group. A highly regarded thought leader on blockchain and distributed ledger technology, Usman has briefed the offices of several prime ministers, as well as ministers, on blockchain's disruptive power, and is regularly invited to speak to business leaders and at global blockchain conferences throughout the world.
Usman was named as one of the "Top 25 Most Influential Lawyers" by Canadian Lawyer (2018) and as one of the top FinTech lawyers in Canada (Band 1) by Chambers for four consecutive years (2020 - 2023). Most recently, he was recognized in Toronto Life's The Influentials 2021 list, an annual feature that highlights Toronto's most influential people over the last 12 months.
Author of over 25 legal and academic publications, Usman is set to publish The Law of Blockchain Technology (Thomson Reuters) in 2023.
As a global thought leader on blockchain's disruptive power, Usman has lectured at the International Monetary Fund (IMF), the Bank for International Settlements (BIS), the Financial Stability Board (FSB) and the Monetary Authority of Singapore (MAS). He has also co-lectured with the heads of blockchain for Nasdaq and the TMX, and has also presented to the Investment Industry Regulatory Organization of Canada (IIROC), the Mutual Fund Dealers Association (MFDA), the Law Society of Ontario (LSO), the Royal Canadian Mounted Police (RCMP), the Chartered Professional Accountants of Canada (CPA), and several other regulatory organizations. Since 2019, Usman has also been serving as an Adjunct Professor with the University of Toronto (Faculty of Law), teaching a course entitled "Blockchain, Digital Assets, and the Law".

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