Government of Canada Promotes a Well-Functioning Financial System

April 3, 2019 – Ottawa, Ontario – Department of Finance Canada

The Government is committed to building confidence in Canada's sound and resilient financial system, which is an essential part of having an economy that works for the middle class and those working hard to join it.

To that end, the Government today took action to modernize and enhance the Canadian deposit insurance framework so that Canadians can continue to be served effectively by deposit products offered by financial institutions. The amendments released today to the Canada Deposit Insurance Corporation Act (CDIC Act) follow a consultation with Canadians and respond to a Budget 2017 and Budget 2018 commitment to introduce legislative amendments that ensure that the framework continues to meet its objectives, including supporting financial stability.

The amendments to the CDIC Act:

• Remove travellers' cheques, which are no longer issued by member institutions, as an eligible deposit.
• Eliminate the five-year term limit on guaranteed investment certificates (GICs), as longer-term products are now available. 
• Extend coverage to foreign currency deposits, which are widely used by Canadians.
• Treat all registered products in the same manner by adding new deposit categories for Registered Education Savings Plans and Registered Disability Savings Plans, so that every registered product is covered up to the same $100,000 limit.
• Streamline coverage for mortgage tax accounts by eliminating their separate coverage category (funds held in mortgage tax accounts would still receive coverage under other coverage categories as long as the funds are held as an eligible deposit, e.g., as an individual or joint deposit).
• Improve the rules for trust deposit accounts, by clarifying record keeping requirements and facilitating more timely payouts if a bank fails.

The deposit insurance review provisions pertaining to travellers' cheques, removing term limits on GICs, and extending coverage to foreign currency deposits come into force April 30, 2020. The amendments pertaining to registered deposits, mortgage tax accounts, and trust deposits come into force one year later, April 30, 2021.