Appearance before the House Standing Committee on Industry and Technology (INDU) (November 25, 2024)

Study: Potential anti-competitive behaviour in Canada’s e-Transfer ecosystem, and the broader electronic payments industry

About INDU

The House of Commons Standing Committee on Industry and Technology studies and reports on legislation and the activities and spending of the members of the Innovation and Economic Development portfolio, and other issues related to:

• innovation, industry and technology capability;
• telecommunications and digital policy;
• intellectual property;
• investment, competition, trade, small business and tourism; and
• rules and services that support the effective operation of the marketplace.

Opening statement

November 25, 2024

Ottawa, Ontario

Check against delivery

Thank you, Mr. Chair, for the introduction, and to the Committee for inviting us to appear before you today.

My name is Shereen Benzvy Miller. I am delighted to have been recently appointed as the Commissioner of the Financial Consumer Agency of Canada, or FCAC.

I have been Commissioner for 12 days, and I am honoured to lead an Agency with such an important mandate.

I joined during Financial Literacy Month, which takes place every November, and is now wrapping up.

The focus of this year’s campaign is to encourage Canadians to talk about money and take steps to build their financial knowledge and confidence.

FCAC’s research shows that money conversations can lead to better financial outcomes.

FCAC welcomes this opportunity to contribute to the Committee’s study of Canada’s e-Transfer ecosystem, and the broader electronic payments industry.

Joining me today are 3 members of my executive committee.

We have Dr. Supriya Syal, Deputy Commissioner of Research, Policy and Education.

We also have Frank Lofranco, Deputy Commissioner of Supervision and Enforcement.

And finally, we have Jason Bouzanis, Assistant Commissioner of Public Affairs.

Each of these three functions work together to advance the Agency’s mandate, and support and protect Canadians.

It is my hope that their knowledge and insights will aid the Committee and inform our meeting today.

In my opening statement, I will begin by outlining FCAC’s mandate.

Then I will turn to FCAC’s role as it relates to the payment ecosystem. 

I will also explain the regulatory requirements related to electronic payments that FCAC oversees.

Finally, I will address interchange fees and e-Transfers before concluding.

FCAC mandate

FCAC is an independent federal agency that protects the rights and interests of consumers of financial products and services.

This includes the rights of merchants who process payment cards.

The Agency’s mandate includes many important elements.

First, as a strong and effective regulator, we supervise the compliance of federally regulated financial entities with consumer protection measures set out in legislation, public commitments, and codes of conduct.

That short summary of the regulatory side of our mandate carries great significance.

Compliance with market conduct obligations leads to consumer protection and, ultimately, more positive financial outcomes for Canadians.

Protected consumers leads to trust and consumer confidence in financial institutions.

Consumer confidence contributes to the safety and soundness of the financial system.

The financial literacy side of our mandate is equally important.

Through FCAC’s National Financial Literacy Strategy, we work with stakeholders from across the country to build the financial resilience of Canadians.

FCAC also conducts research and evidence-based analysis on trends and issues that impact financial consumers.

This is particularly important as an avenue through which we inform and support the Department of Finance’s role in developing financial sector policy and legislation.

As we look forward, FCAC’s mandate is expanding to include responsibility for overseeing, administering, and enforcing Canada’s Consumer-Driven Banking Framework.

As a leader and innovator in financial consumer protection, FCAC is well-placed to take on this responsibility.

FCAC’s mandate as it relates to the payment ecosystem

Given that the Committee is furthering its study with a more specific area of focus, I will concentrate my remarks on FCAC’s mandate as it relates to the payment ecosystem.

As discussed at our previous appearance before this committee, FCAC oversees the market conduct obligations of payment card networks operators—also known as PCNOs—under the Code of Conduct for the Payment Card Industry.

Examples of payment card network operators in Canada include VISA Canada, Mastercard Canada, American Express, Discover, Union Pay, and Interac for its debit card product.

Payment card network operators must incorporate the Code—in its entirety—into their contracts, business practices, and governing rules.

Payment card network operators are responsible for ensuring that the payment processing companies using their network comply with the obligations under the Code.

That means that payment processing companies must understand and work proactively to meet the market conduct obligations in the Code.

Revised Code of Conduct for the Payment Card Industry

Recently, the Government announced a revised Code of Conduct for the Payment Card Industry.

Most elements came into effect on October 30th, and the remaining – more technical – elements will follow on April 30th, 2025.

Merchants in Canada who process payment cards now benefit from protections designed to ensure transparency, flexibility and choice.

Disclosure and complaint handling are critical components of protection, whether that be for consumers in retail banking or merchants.

And enhanced disclosure and improved complaint-handling are key elements of the new Code.

For example, merchants will receive more information on card processing fees at the time of quote, when they sign their agreement with their service provider, and in their monthly statement.

Importantly, merchants also now have access to a complaint handling process that is clear, simple, transparent, and that requires that their complaint be handled in a timely manner.

In addition, merchants have a longer period to cancel agreements and may do so if certain fee reductions are not passed on in full.

FCAC expects payment card network operators to implement the revised Code, and it is our role to supervise their compliance with their market conduct obligations.

While FCAC does not comment publicly on its ongoing supervisory activities, the Agency’s conclusions on the compliance of federally regulated financial entities are described in our Annual Report.

I should also mention that FCAC provides unbiased and authoritative information to help merchants understand their rights under the Code.

Interchange fees

I believe it would also be valuable to take this opportunity to briefly touch on FCAC’s oversight of interchange and other core payment card processing fees.

Regarding payment card fees, payment card networks and their participants are expected to meet their commitments related to fees under the Code.

The commitments related to interchange fees are:

• to disclose fees in language that is clear, simple and not misleading;
• to notify merchants of fee changes within a minimum of 90 days of the effective date; and
• to respect merchants’ right to cancel agreements.

It is important to note that the market sets interchange fees.

E-Transfers

We also recognize the Committee’s interest in e-Transfers, a service provided by the Interac Corporation.

Data from Payments Canada continues to suggest that Canadians primarily use online transfer services such as Interac e-transfer for peer-to-peer money transfers, rather than for purchasing good or services.

Interac is one of the payment card network operators that has signed on to the Code of Conduct for the Payment Card Industry.

FCAC protects both consumers and merchants with regard to services offered by Interac.

For consumers, e-transfers are a service provided by banks. Banks must disclose the fees they charge for Interac e-Transfers to their customers.

There are very specific and stringent rules around the disclosure of fees charged by banks to their customers.

These are one of many obligations overseen by FCAC under the Financial Consumer Protection Framework.

For merchants, Interac must ensure that payment processing companies that enable merchants to accept debit cards at the point-of-sale disclose the fees charged for this service.

This is one of many requirements under the Code of Conduct for the Payment Card Industry that is overseen by FCAC.

In both these cases, for consumers and merchants, disclosure of fee information enables consumers and merchants to make informed decisions about the products and services available to them.

Interac fees are commercial decisions.

Conclusion – FCAC role in financial system safety and consumer confidence

To conclude, I briefly outlined FCAC’s mandate and how we protect financial consumers and merchants.

I have described FCAC’s role in the payments ecosystem.

And, I have addressed FCAC’s oversight as it relates to interchange fees and e-Transfers.

FCAC’s role is an important one. We safeguard consumers and merchants, and equip them with the knowledge to make informed decisions.

FCAC’s regulatory, research, and financial education resources all work together, and contribute to supporting a strong, safe and stable financial system for the benefit of Canadians.

Through effective consumer protection and a commitment to strengthening financial literacy, FCAC fosters trust.

A trust that enables Canadians to navigate their financial journeys with confidence and peace of mind.

Mr. Chair, that concludes my opening remarks. I look forward to the Committee’s questions.

Code of Conduct for the Payment Card Industry

• The Code of Conduct for the Payment Card Industry is designed to protect merchants who process payment cards by ensuring transparency, flexibility, and choice for merchants processing payment cards.
• FCAC’s role is to supervise compliance with the Code of Conduct by payment card network operators (PCNOs).

Merchants' protection

• Under the new Code, merchants now:
  • Receive more information on fees so they can make better informed decisions.
    • Merchant agreements must contain an information summary box that clearly discloses fees.
  • Have access to a clear, simple and transparent complaint handling process that investigates merchant complaints in a timely manner.
    • Complaints must be acknowledged within 5 business days, investigated and addressed within 20 business days (30 business days for Payment Card Network Operators) according to order of urgency.
  • Be able to exit agreements without penalty more easily, including when certain fees increase.
    • Merchants are notified of their right to cancel between 30 to 60 days prior to and within 70 calendar days after the effective date of new or increased fees (previously they had 90 days prior to the effective date).

Which organizations are overseen by the Code of Conduct?

• It includes American Express Canada, Discover, Mastercard Canada, VISA Canada and Interac.
• The Code also applies to payment processing companies including Acquirers, Downstream Participants, and Issuers.

Other important details on the Code

• The new Code of Conduct for the Payment Card Industry In Canada came into force on October 30, 2024 (it replaces the Code of Conduct for the Credit and Debit Card Industry).
  • The remaining (more technical) elements are planned for April 2025.
• The Code specifies the information on specific types of fees and fee changes that must be disclosed to merchants. For details, see Annex A: Interchange fees and impact on merchants
• Technical changes to the Code of Conduct for the Payment Card Industry can be made at any time and there is a commitment to review the Code after 3 years.

Codes of conduct: Supervision and enforcement

• Codes of Conduct and public commitments are effective and viable tools to regulate certain financial sector issues.
• Like regulations, they set out the market conduct obligations that industry must meet.
• FCAC communicates its expectations to industry through its supervisory tools and activities, and monitors compliance.

Enforcement

• FCAC may issue a Notice of Non-Compliance when an investigation determines there are reasonable grounds to believe that a regulated entity is in breach of its obligations under a Code of Conduct or public commitment.
• A Notice of Non-Compliance specifies the nature of the breach, but no Administrative Monetary Penalty applies to it, nor does the Commissioner have authority to make public the name of the regulated entity.

Example of enforcement actions: Decision #126 and Compliance bulletin B-7

• Decision #126 (2016) stemmed from a Notice of non-compliance under the previous Code of Conduct for the Credit and Debit Card Industry in Canada.
• Merchants were issued monthly statements that incorrectly disclosed certain transactions. As a result, they were provided with information that was unclear and potentially misleading.
• In 2020, FCAC issued Compliance bulletin B-7 on the role of payment card network operators in ensuring participant compliance with the Code of Conduct for the Credit and Debit Card Industry in Canada.
• This bulletin sets out FCAC’s expectations that PCNOs:
  • Be proactive: Set up and use tools to prevent, monitor, and enforce compliance.
  • Ensure compliance: Make sure their participants follow the rules using these tools.
  • Respond quickly: Have systems in place to act on FCAC requests and guidance promptly.
  • Show proof: Be ready to demonstrate how they are meeting these expectations when asked.

Supervision

• FCAC’s supervisory activities include, as described in the Agency’s Supervision Framework.
• Regulated entities must understand and work proactively to meet their market conduct obligations, including Codes of Conduct and public commitments.
• FCAC does not comment publicly on its ongoing supervisory activities. However, its conclusions on the compliance of financial institutions with market conduct obligations are published in FCAC’s Annual Report.

E-transfers/banking fees versus debit cards/interchange cards/interchange fees

• E-transfers and debit card payments are both enabled by Interac.
• FCAC makes sure that both consumers and merchants are protected when using Interac services.
• For Consumers: Banks must clearly DISCLOSE the fees they charge for Interac e-Transfers. These are part of the market conduct obligations that FCAC oversees (Financial Consumer Protection Framework).
• For Merchants (Interac Debit Cards): The Code requires Interac to make sure that companies processing its’ debit card payments DISCLOSE the fees they charge to merchants who accept these cards. This is part of the Code of Conduct for the Payment Card Industry that FCAC oversees. 

Debit card payments (and interchange fees)

• Consumers must have a debit card to make debit card payments, or purchases.
• Debit card payments can be made at a point-of-sale or on-line purchase.
• For point-of-sale purchases, consumers will present a physical card or a virtual card, which in the latter case the debit card is attached to a mobile wallet.
• For online payments, consumers will enter their debit card information.
• As debit card payments require consumers to use a debit card, these payments are captured within the scope of the Code of Conduct for the Payment Network.
• FCAC’s supervises PCNOs’ compliance with merchant protections that are set out on the Code of Conduct for the Payment Network.

Interchange Fees

• Debit cards, like credit cards, are subject to an interchange fee.
• Interchange fees, or rates, are set by individual PCNOs. In recent years, interchange fees have been negotiated between PCNOs and Finance Canada.

E-transfers (banking fees)

• By comparison e-transfers do not require consumers to have a debit card.
• To send or receive an e-transfer, consumers are required to have a bank account and an email address or mobile phone number.
• E-transfers are considered a banking service, and banks are therefore subject to consumer protection obligations that fall under the Financial Consumer Protection Framework.
• FCAC supervises compliance with the Financial Consumer Protection Framework.

E-transfer Fees

• E-transfer fees charged to consumers are set by individual banks.

Summary table

Role of Bank of Canada

• The Bank Canada oversees the Interac e-transfers system to ensure it is safe, viable, and effective.
• The Bank of Canada oversees the clearing of debit card payments through its Automated Clearing Settlement System.

Info for merchants on the Code of Conduct for the Payment Card Industry

• FCAC provides information on Canada.ca to help merchants understand their rights under the Code of Conduct for the Payment Card Industry.
• The information is presented in plain language and is clear, accessible, and easy to find.
• FCAC’s Consumer Information Centre responds to calls and correspondence from consumers and merchants and provides information to help merchants understand their rights under the Code.

Consumer information online

• As part of its mandate, FCAC provides unbiased and authoritative information to financial consumers and merchants to help them make informed financial decisions and navigate the financial marketplace. 
• FCAC’s information for merchants on accepting card payments includes:
  • An overview of the Code of Conduct for the Payment Card Industry in Canada
  • Merchant rights and the payment card industry, including when filing a complaint about a payment card network
  • How card payment transactions work
  • Rules around surcharges, service fees, conveniences fees and discounts
• In total, FCAC received approximately 6.7 million visits to its consumer information pages on Canada.ca in 2023-2024.
  • FCAC’s merchant information pages receive an average of more than 50,000 annual visits.

FCAC’s Consumer Information Centre

• FCAC has a Consumer Information Centre that responds to calls and correspondence from consumers and merchants and provides them with information to make informed decisions.
• The role of FCAC’s Consumer Information Centre is to provide information and help merchants understand the complaint-handling processes that apply to their situation. FCAC is not a complaint resolution body.

Consumer and merchant complaints to FCAC's Consumer Info Centre

• FCAC’s Consumer Information Centre responds to enquiries from consumers and merchants and provides them with information to make informed decisions.
• Although FCAC is not a complaint resolution body, consumers and merchants who process card payments may also report their complaints to FCAC.

What does FCAC do with complaints it receivex directly from merchants and consumers?

• When a consumer or merchant reports a complaint about their bank or about a payment card network operator to its Consumer Information Centre, FCAC:
  • provides them with information to help understand the complaint-handling processes that apply to their situation
  • uses complaint data to inform supervisory activities as outlined in FCAC’s Supervision Framework, and to monitor trends and issues that may have an impact on financial consumers.
• It is important to note that FCAC does not resolve individual disputes and does not provide redress or compensation.
• Through the Financial Consumer Protection Framework, FCAC has regulatory oversight of complaint handling processes at federally regulated financial institutions, as well as Canada’s External Complaint Body for financial institutions (see Annex A for details).

On the Nature of complaints reported directly to FCAC

From merchants

• Complaints from merchants are among the top 5 categories received by FCAC’s Consumer Information Centre.
  • In 2023-2024, merchant complaints about penalties made up 4.6% of all complaints received by FCAC’s Consumer Information Centre.

From consumers

• In 2023–2024, FCAC received almost 6,800 complaints and enquiries directly from consumers.
  • Of those, only 283 were related to consumer protection measures that FCAC oversees.
  • Complaints regarding Interac e-Transfer fees, specifically, were not one of the top 5 categories of complaints received (see the table below.)

Data on trends at FCAC's Consumer Information Centre (CIC)

• The volume of complaints related to credit cards has been steadily increasing over the past few years. Since 2021, the CIC has received a total of over 4000 complaints and enquiries from consumers related to credit cards.
• The last fiscal year (2023-24) showed an increase in the number of complaints for fees and charges and complaint-handling, compared to the previous years.
• The top classifications for credit card complaints are Payment (16%), Collections (15%) and Fees/charges (14.5%).

*2024-2025 data partial year (April to September)

• There were over 120 complaints over past 1.5 years related to fees and charges, with the main issues being:
  • Currency conversion fee
  • Credit card annual fee
  • Interest (e.g. charged on full amount due and not remaining balance)
  • Overlimit fees
  • SME Interchange fee
• There were 55 complaints for the past 1.5 years related to interest, with the main issues being:
  • How interest rates are set and calculated
  • Increases (e.g. can bank increase interest rate, increased without notification)
  • Payment (e.g. why interest charged on full amount when partial payment is made; why interest charged when payment is delayed by the bank)
  • Cash advance versus regular purchases

Low-cost/no-cost banking services

• FCAC is currently working with the Canadian Bankers Association and the Department of Finance to develop a modernized low-cost, no-cost account public commitment by banks.
• More information will be available soon, but what we can say is that we are working to develop a commitment that:
  • expands eligibility to more Canadians, including those who are most vulnerable
  • includes more and different types of transactions, including online transfers and electronic payments
• A number of low and no-cost bank accounts are already available under the 2014 Commitment, and consumers can find these using FCAC’s bank account comparison tool.
• But we have work to do, because awareness among consumers who would benefit the most from these types of accounts is low. When the new commitment is announced, FCAC will work with the financial ecosystem to increase awareness among eligible groups.

Background on the low-cost/no-cost bank account commitment

• FCAC is updating the original Low-cost and No-cost Commitment from 2014 to make banking more affordable and accessible for Canadians experiencing financial vulnerability.
• As part of this work, FCAC met with financial institutions, experts in the field of financial consumers, and other stakeholders. We also invited public views and conducted research into consumer awareness and needs.

Vulnerable Canadians who will benefit from low-cost/no-cost bank accounts

• Financial vulnerability can affect anyone due to various circumstances such as life-changing events, psychological and physical characteristics, and social barriers. Certain groups, including youth, women, single parents, newcomers, people with disabilities, and Indigenous Peoples, are more likely to face financial vulnerability due to systemic barriers and specific challenges like low income, lack of experience, and low financial confidence.
• Key insights from FCAC’s engagements and research, including a public opinion survey, include the following:
• Accounts with no or low monthly fees and a greater number of transactions per month are important features for most Canadians.
• Few Canadians are aware of the existing public commitment to provide low-cost or no-cost account options. 84% of participants in FCAC’s public opinion research were unaware of the public commitment.
• Some of Canada’s most vulnerable do not have a chequing account at all. Among those that do, many don’t have access to no-cost accounts at the banks signed on to the 2014 Commitment.

Lower non-sufficient funds (NSF) fees

• FCAC will oversee banks’ compliance with (proposed) new regulations that limit NSF fees to $10.
• FCAC will develop clear and timely information for consumers to explain these new requirements and help them understand their rights and responsibilities.

Proposed amendments

• Amendments to the regulations for non-sufficient funds (NSF) fees developed by the Department of Finance were pre-published in the Canada Gazette, Part I for a 30-day public consultation on November 16, 2024.
• The proposed regulations follow the announcement in Budget 2024 of the government’s intent to cap the non-sufficient funds (NSF) fees charged by banks to $10 per instance.
• In addition, the proposed regulations would:
  • restrict the imposition of NSF fees on persons who have been charged an NSF fee within the last 72 hours, and on overdrawn amounts of under $10;
  • require banks to alert customers by electronic means (between 8:00 a.m. and 4:00 p.m. local time) when their account balance falls below zero (or beyond their overdraft limit) as a result of a payment;
  • provide customers with a 3-hour grace period in which to make a deposit or transfer into their account to cover the payment without being charged an NSF fee; and
  • require banks to publicly disclose the number of NSF fees charged, the number of customers impacted, and the total revenue generated from these fees on an annual basis.

FCAC’s role: Interchange fees charged to merchants

• CAC oversees Payment Card Network Operators’ compliance with their obligations related to interchange fees.
• PCNOs must disclose fees in language that is clear, simple and not misleading.
  • Agreements must include an information summary box that discloses fees, and that provides key elements of the agreement in a consolidated fashion.
• PCNOs must notify merchants of fee changes within a minimum of 90 days of the effective date.
• PCNO must respect merchants’ right to cancel agreements.
• FCAC does not oversee nor intervene in the setting of interchange rates.

Details on requirememts for interchange fee disclosure

• Merchants must be notified of their right to cancel between 30 to 60 days prior to the effective date of new or increased fees and can cancel their agreements within 70 calendar days after the effective date of new or increased fees
• Payment processors must provide the merchant with a cost per transaction table at the time of quote (see Annex B in Code of Conduct for the Payment Card Industry).
• This table provides the total all-in cost per transaction (interchange + network assessment fee + payment processor fee) by card type and payment channel (e.g., Network A’s premium credit card accepted online; Network B’s basic credit card accepted in-person.)
• The merchant must also be provided with the assumptions, such as the card mix and volumes, used to populate the table to allow the merchant to easily compare pricing across different providers.
• The processor must also provide the merchant with a table that sets out additional costs that are not included in the cost per transaction disclosure (see Annex C in Code of Conduct for the Payment Card Industry). This could include fees such as application fees, monthly fees, costs for returns, and terminal installation fees.
• The Code of Conduct for the Payment Card Industry requires payment processors to notify merchants in advance of any new fees passed on to the merchant or any reductions in mandatory network fees (such as interchange) for which the merchant will not receive the full benefit.

Finance's agreement with Visa and MC on interchange fees

• On October 1, 2024, the federal government announced an agreement with Visa and Mastercard to lower interchange fees for some businesses and non-profit organizations.
• Visa, Mastercard and the Department of Finance Canada would be better placed to provide information about this agreement.

Consumer-driven banking and potential to increase competition

• Consumer-driven banking should openup the financial sector to more players and give consumers more choices when it comes to financial services.
• The exact impact consumer-driven banking will have on Canada’s financial sector remains to be seen. The Framework has not been finalized and the regulations have not been drafted.

FCAC’srole

• FCAC welcomes its new role in overseeing, administering, and enforcing Canada’s Consumer-Driven Banking Framework.
• As the market conduct regulator for federally regulated financial institutions, FCAC is well-placed to take on this responsibility.  
• Naming FCAC to oversee consumer-driven banking puts consumer protection at the very heart of this new initiative. It’s also aligned with what has been done in other jurisdictions.
• Canadian consumers want strong and consistent protections no matter what financial products they use, whether they are provided by banks or fintechs.
• FCAC also conducts research on consumer needs and behaviours, including how financial decisions are made. This knowledge and our consumer education mandate position us well to protect consumers while overseeing an innovative and competitive framework.

The potential of consumer-driven banking increase competition

• Consumer-driven banking should allow for more players to securely provide tailored and innovative financial products and services to Canadians. And the more players there are, the greater the competition should be.
• Consumers will be in control of their financial data, will be able to share it securely, and will have more opportunity to shop around for products. In that sense, it should increase competition.
• N.B. Canada’s largest banks will be mandated to join the Consumer-Driven Banking Framework. Other federally regulated financial institutions, credit unions, crown corporations acting as banks, and provincially regulated entities can opt in.

Scope (including payment methods) and how consumers might benefit

• Opening up the financial sector through Consumer-Driven Banking supports innovation and will increase the range of services available to Canadians, while prioritizing consumer protection.
• Consumer-driven banking will give people greater control over their financial information. Similarly, people with limited access to financial services and without a long credit history, such as younger Canadians and new Canadians, may benefit from consumer-driven banking innovation.
  • Example: Younger Canadians or new Canadians may be able to use fintech apps to build their credit based on their transaction data (e.g. showing that they paid their rent or credit card on time). This could help them qualify for a loan.
• The government is taking a phased approach to the 3 elements of scope:
  • participants
  • breadth of data sharing
  • functionality
• This will be an iterative process that may see the Framework evolve significantly over time.
• In the initial phase, participating entities such as banks and fintechs will be required to share data at the consumer’s request related to deposit accounts (e.g., chequing and savings), registered and non-registered investment accounts, and lending products, such as credit cards, lines of credit, and mortgages.
• Later, the government may consider expanding the scope to include additional data, entities, entry processes (e.g., tiered accreditation), and functionalities (such as the ability to initiate payments).
• For questions related to the exact nature of services that will be offered and precisely what will be covered by the Consumer-Driven Banking Framework, the Department of Finance would be best placed to answer.

FCAC’s open banking research findings

• In June 2023, FCAC published the results of a public opinion research into Canadians’ awareness of and expectations for open banking.  
• The research shows that Canadians’ knowledge and understanding of open banking is low.  Few Canadians (just 9%) have heard of open banking.  
• But the research also shows that that strong and consistent consumer protections and consumer education would make consumers more likely to use open banking.
• Canadians assume that the protections are the same when using a fintech or a bank app. Only 18% of respondents knew that protections are different when using services offered by fintechs versus banks.
• Most Canadians (over 80%) said would not use, or would stop using, fintech product and services if they were not protected against theft, fraud, or accidental loss. They would like to have protections similar to the ones they currently have.

Consumer awareness and education

• Open banking is a complex concept, and raising awareness among Canadians will be key to the success of Canada’s Consumer-Driven Banking Framework.
• As a starting point, FCAC is studying best practices and lessons learned on consumer awareness from international jurisdictions to inform the development of a campaign strategy.
• We will also analyze FCAC’s public opinion research to better understand the diverse needs of the Canadian population to reach audience segments with the right information at the right time.
• An effective campaign will need to be phased and multi-year. For example, we would anticipate:
  • an initial phase to raise general awareness
  • a more comprehensive campaign once open banking is widely available and there is more information to communicate to help Canadians understand how they might benefit from Canada’s Consumer-Driven Banking system
  • finally, sustained communications efforts would be adjusted based on campaign evaluation results

Protecting consumer data

• Consumer-driven banking offers a safe and secure way for consumers to use their financial data to access financial services. While these types of third-party financial services are available today, they rely on data-sharing methods that can put consumers at risk.
• Currently, some fintech apps use screen scraping which requires users to provide their online banking username and password to access their financial data.
• The apps use this information to automatically log into bank accounts. They then transfer customer data to an external database that supports their products and services.
• Screen scraping raises security, liability, and privacy risks to consumers and the financial system.
  • For example, if a customer provides their online banking username and password to a fintech that is a separate from the bank, they may lose the protection their bank offers against unauthorized transactions.
• Canadian consumers assume that different types of financial products and services come with the same protections. That’s not the case when it comes to fintech products vs. bank products.
• That’s why it is important to build a new financial sector with a level playing field.
• Under consumer-driven banking, common rules on privacy, data protection and liability will apply, and Canadians will be better protected.

Progress since budget 2024

• FCAC is working closely with the Department of Finance and industry to prepare and plan for its new responsibilities.
• The legislation passed with the Budget Implementation Act in June established the foundational elements of Canada’s Consumer-Driven Banking Framework, including governance, scope, as well as the criteria and process for the technical standard.
• The remaining legislation is expected in the near term. Regulations will be drafted in 2025.
• This summer, the Department of Finance and FCAC held a series of engagement sessions with stakeholders in support of the development of the remaining elements of the Framework (i.e., common rules on privacy and consent, liability, security, consumer protection and financial inclusion).
• FCAC has obtained $1 million from Budget 2024 for preparatory activities in 2024-25. For example, FCAC will be using a portion of these funds to contract a firm to conduct a scan of best practices and lessons learned from consumer awareness campaigns in other jurisdictions.  
• FCAC has made significant progress in defining the structure, business processes and supports that will be needed to enable this important work.
• In addition, FCAC has engaged resources with specific expertise and is engaging with other countries that have implemented open banking.  

On the Senior Deputy Commissioner to lead consumer-driven banking

• FCAC has made significant progress in defining the roles and responsibilities of this new position, along with the structure and supports that will be needed to support this important work.
• The Agency is preparing to launch the candidate search. A nomination will be announced once the process is complete.
• For questions related to timing to introduce consumer-driven banking and comparisons to other jurisdictions, the Department of Finance would be best placed to answer.

Alignment with provincial laws and regulations

• Canada’s largest banks – which are federally regulated – will be mandated to participate.
• Other federally regulated financial institutions, credit unions, crown corporations acting as banks, and provincially regulated entities can opt in.
• All participants will be subject to the Consumer-Driven Banking Framework and FCAC’s supervision of the Framework.
• However, provincial entities that opt in would only be subject to FCAC’s oversight of market conduct requirements within the Consumer Driven Banking Framework.
• For specific questions related to provincial entities, the Department of Finance would be best placed to answer.

Annex A: Other relevant topics

The complaint handling process for consumers

• If a customer is not satisfied with a product or service from their financial institution, FCAC encourages them to file a complaint with their financial institution, and to follow its complaint handling process.
• The process includes the option to escalate the complaint to an impartial External Complaints Body if the consumer is unsatisfied with the resolution offered by their financial institution.
• As part of its mandate, FCAC reviews the complaints it receives, and the nature of these complaints may inform supervisory actions taken by the Agency.
• Consumer complaints also play an important role in identifying concerns in the market conduct of federally regulated financial entities and gathering information on trends and emerging issues.

Single external complaints body

• As of November 1, 2024, Canadians have a single external complaints body for banking, the Ombudsman for Banking Services and Investments (OBSI).
• Previously, Canadian banks could choose between one of two external complaints bodies.
• The move to a single ECB is good news for consumers and further strengthens complaint handling in Canada.
• When combined with the complaint handling requirements introduced under Canada’s Financial Consumer Protection Framework, this change will provide Canadians with a more effective complaint handling system in banking.
• FCAC supervises the compliance of federally regulated banks and the ECB with their legal obligations, including the right of consumers to a fair, timely and accessible complaint-handling process.

On consumer complaints reported by regulated entities

• Since June 2022, banks must report to FCAC all records of consumer complaints reported to designated employees, as outlined in the Bank Act and Financial Consumer Protection Framework regulations.
• Prior to that, banks were only required to submit summary information about complaints to FCAC that regarded market conduct obligations (legislative and regulatory obligations, Codes of Conduct and public commitments overseen by the Agency).
• The enhanced information has strengthened the Agency’s ability to identify concerns in the market conduct of financial institutions and gather information on trends and emerging issues.  
• In 2023–2024, the Agency received over 260,000 reportable complaints from regulated entities.

The top 5 products or services about which complaints from banks were reported in 2023–2024:

On FCAC's Consumer Information Centre

• The role of FCAC’s Consumer Information Centre is to provide information and help merchants understand the complaint-handling processes that apply to their situation.
• FCAC is not a complaint resolution body. See issue sheet on consumer and merchant complaints to FCAC earlier in this binder.

FCAC’s role in the regulatory framework for credit cards

• FCAC oversees the compliance of federally regulated financial entities with legal requirements and Codes of Conduct for offering and selling credit card products and for processing credit cards.
• FCAC supervises the application of the Financial Consumer Protection Framework. The Department of Finance Canada develops financial sector policy and legislation.

Supervision Framework

• A goal of FCAC’s risk-based, outcome driven Supervision Framework is to monitor market conduct issues and have federally regulated financial institutions address such issues on a timely basis.
• FCAC’s Supervision Framework explains how the Agency conducts its supervision and enforcement work.
• FCAC employs a variety of supervisory tools across three pillars, namely promoting compliance with market conduct obligations, monitoring compliance with market conduct obligations, and enforcing compliance with market conduct obligations.
• FCAC does not comment publicly on its ongoing supervisory activities. However, FCAC describes its conclusions on the compliance of financial institutions with market conduct obligations in FCAC’s Annual Report.

Consumer protection and credit cards

• When it comes to the Codes of Conducts, the requirements that apply to banks are set out in the Financial Consumer Protection Framework, which is part of the Bank Act.
• It is important to note that companies regulated by provinces and territories also offer and help merchants process credit cards. These companies are subject to requirements set by those jurisdictions.

Disclosure

• By law, federally regulated financial institutions, such as banks, must provide consumers with information in a manner, and using language, that is clear, simple, and not misleading.
• This applies to disclosure documents such as application forms and agreements for credit cards.
• For example, the annual interest rates, how interest is calculated, minimum payments, annual fees and other charges must appear in an information box on the application form.
• The regulations also stipulate information that must be included in monthly credit card statements, such as itemized transactions, grace periods and minimum payment due dates, the annual interest rate, and outstanding balances.

Express consent

• Banks (and all FRFIs) must obtain consumers’ express consent before providing a product or service.
• Banks (and all FRFIs) must obtain consumers express consent before raising credit limits.

Changes made to interest rates and fees

• The decision to change the rate of interest on credit cards lies with a financial institution.
• Federally regulated financial institutions must provide consumers with the details of changes to the features or the terms and conditions of a credit card, such as the annual interest rate, at least 30 days before the changes take effect. (The information must be in writing, in paper or electronic format depending on how the consumer has consented to receive information).

Interest rates

• The decision to set a specific interest rate on a credit card lies with the financial institution, provided they comply with their market conduct obligations, including those related to disclosure.
• Banks are also subject to the criminal rate of interest threshold in the Criminal Code, which is currently set at 60% annual interest and is applicable to most lending products in Canada, including credit cards. 
• Effective January 1, 2025, the criminal rate of interest will become 35%. FCAC supports this change to protect vulnerable consumers.

Cancellation and unauthorized transactions

• There are protections in the Bank Act to protect consumers from unauthorised transactions, unless there is proof of gross negligence. Banks are liable for unauthorized credit card transactions.
• Consumers have the right to cancel credit card agreements.

Public commitments

• Several Payment Card Network Operators have made public commitments to protect consumers from the unauthorized use of their credit card.
• These commitments outline consumers’ liability in relation to fraudulent transactions on their credit card.

Financial Consumer Protection Framework

• In 2022, the federal government introduced the Financial Consumer Protection Framework. This was a milestone for consumer protection in Canada.
• The Financial Consumer Protection Framework holds banks to a higher standard and requires them to take greater responsibility for consumer outcomes.
• The Framework introduced more than 60 new and enhanced consumer protection measures.

Electronic alerts

• For credit cards, institutions must send electronic alerts automatically when the credit available falls below $100 or an amount set by the consumer.

Renewal notice

• Institutions must notify consumers in advance when products like credit cards are about to renew. Specifically, for products or services with terms of 30 days or more, banks are required to send two reminders:
  • 21 days before the end of the term
  • 5 days before the end of the term
• These reminders must include details on interest rates, charges, and penalties.
• This helps consumers decide whether to renew or cancel the products or services.

Appropriate products

• Banks must also assess the financial circumstances of consumers and offer products and services that are appropriate to their needs.
• For example, many premium credit cards include a variety of benefits for a higher annual fee.
• Before issuing these cards to consumers, banks are expected to assess whether the product or service is appropriate for the person's circumstances, including their financial needs.

FCAC powers

• In 2018, the Government of Canada adopted legislation to modernize the Financial Consumer Protection Framework in the Bank Act.
• The legislation included new powers to better protect Canadians in their dealing with banks, which came into force in April 2020. They include the power to impose a penalty of up to $10 million on banks per violation of their legal obligations.
• Since 2019, FCAC has issued 7 Commissioner’s Decisions regarding violations of regulations related to credit cards. These are published on Canada.ca.
• Negative option billing was the most common type of violation.

Impact of credit card interest rates on consumers

• FCAC does not set interest rates; these are determined by the credit card issuers.
• FCAC conducts research and monitors trends and issues that have an impact on financial consumers.

What FCAC’s Canadian financial capability survey shows

• Historically conducted at 5-year intervals, now moving to 3-yr intervals, FCAC’s Canadian Financial Capability Survey sheds light on Canadians’ knowledge, behaviours and skills as they relate to financial decision-making and assesses how Canadians are doing on indicators of financial well-being.
• The survey was administered among approx. 8,000 Canadians, between February 14 and March 22, 2024. Data is still being analyzed and validated for publication in 2025, but we can share some preliminary results relevant to the committee’s study:
  • 32% of those surveyed in 2024 reported they had credit card debt, up from 29% in 2019.
  • 45% of respondents said they always pay their credit cards in full, down from 54% in 2019.
  • Among those who were struggling or falling behind with debt repayment, 15% of respondents said they missed one minimum payment on their credit cards in the previous 12 months, and 12% reported missing at least two consecutive months’ worth of minimum credit cards payments in the previous 12 months.

What FCAC's Financial Well-Being Monitor shows

• Recent FCAC research indicates a decline in Canadians’ financial well-being over the past few years, as evidenced by changes from 2019 to 2024 such as an increase in the number of Canadians reporting credit card debt and a decline in the number of Canadians who pay down their credit cards in full.
• Since August 2020, FCAC has been publishing data from its Monthly Financial Well-being Monitor. This survey collects survey data from approximately 1,000 respondents each month to understand and measure the financial well-being of Canadian financial consumers.
• The Monthly Financial Well-being Monitor shows similar trends as the Canadian Financial Capability Survey.
• For example, in 2019, 27% of Canadians had to borrow money to pay for their day-to-day expenses. This increased to 37% in May 2024.
• This, in part, could be attributed to the upward trend in credit card interest rates since 2019 according to data from the Bank of Canada. On average, monthly interest rates on outstanding credit card debt ranged between 18.86% and 19.35% in 2019, whereas in 2024 these rates ranged between 20.28 and 20.74%.

Impact of credit card fees and charges on consumers

• As a regulator, FCAC does not set the fees and charges that financial institutions can charge customers.
• FCAC regulates the compliance financial institutions with the disclosure, express consent and consumer provisions that apply to credit card products. Banks must meet requirements set out in the Financial Consumer Protection Framework, which is part of the Bank Act.

Information, tools and resources for consumers

• FCAC also provides information, tools and resources to help consumers make informed decisions about using financial products, such as credit cards.
  • FCAC receives over 6.5 million visits annually to its consumer information on Canada.ca.
• FCAC’s information about credit cards includes:
  • how to choose a credit card by comparing features such as interest rates, fees, rewards and benefits;
  • how interest is calculated and how payments are applied to outstanding balances; and
  • how to make a complaint to the card issuer.
• FCAC also provides free and easy-to-use online tools and calculators, such as our Credit Card Comparison Tool and Credit Card Payment Calculator.
  • The Credit Card Comparison tool was launched in 2014 and currently has 220 credit cards to compare, with a variety of interest rates, fees and rewards.
• FCAC also offers a credit card payment calculator that allows users to find out how long will take to pay off their credit card and explore options to pay it back faster.

Research and monitoring financial well-being

• FCAC conducts research and monitors trends and issues that impact financial consumers, including how Canadians are doing on indicators of financial well-being.

The National Financial Litteracy Strategy and collective resoponsibility of the financial ecosystem

• The goal of FCAC’s National Financial Literacy Strategy is to help Canadians build financial resilience.
• The National Strategy calls on the financial ecosystem to help consumers develop the skills, capacity and behaviours that are key to financial resilience, rather than putting the onus on individual consumers.
• The financial ecosystem includes community groups, educators, researchers, the financial sector, the government, regulators and many other stakeholders.
• The ecosystem can support consumers in understanding financial products and services and making choices that support their financial resilience. For example, many consumers are unaware of the total long-term cost of debt due to compound interest and fees.
• Stakeholders can also help consumers with strategies for paying down their debts and avoid incurring additional debt-related costs. Helping consumers make informed borrowing choices using affordable credit options and lower-risk debt can help build financial resilience.

Predatory lending

• CAC does not enforce the Criminal Rate of Interest, which is enforced under the Criminal Code. For many years, the Criminal Rate of Interest in Canada has been 60%. Effective January 1, 2025, the rate will become 35%.
• FCAC supports this change to protect vulnerable consumers and continues to contribute to government efforts to protect Canadian consumers from predatory lending with supporting data analysis and research.
• FCAC conducts research and monitors trends and issues that impact financial consumers, including predatory lending.

FCAC’s research on payday loans

• As part of its mandate, FCAC conducts research and provides evidence-based analysis on financial consumer protection issues, including payday loans.
• Payday loans are generally available through lenders that are regulated at the provincial level, however FCAC shares concerns over the risks of payday loans; mainly that they are predatory, particularly to certain population groups and levels of financial literacy/education.
• FCAC’s research indicates that an increasing share of consumers who use payday loans face vulnerabilities, such as being behind on bills or not having emergency funds.
• Reliance on payday loans can stem from a lack of access to mainstream banking and can also contribute to further exacerbating the lack of access (e.g. debt cycles).

Credit card fraud and unauthorized transactions

• FCAC oversees the compliance of regulated entities with federal regulations as they relate to unauthorized transactions, in particular debit and credit card transactions.
• There are protections in the Bank Act to protect consumers from unauthorized transactions, unless there is proof of gross negligence. Banks are liable for unauthorized credit card transactions.
• FCAC's expectations with respect to investigations into allegations of unauthorized credit and debit card transactions are as follows:
  • Federally regulated financial institutions (FRFIs) must weigh all relevant factors before finding the consumer liable, regardless of the method or technology used to process a credit or debit card transaction.
  • Specifically, FRFIs must conduct an investigation to determine whether circumstances beyond the cardholder's control (such as over-the-shoulder snooping, coercion, theft of the card, or system failure) resulted in an unauthorized transaction.
  • FRFIs may not rely solely on authentication technologies to discontinue or refuse to initiate an investigation into allegations of unauthorized transactions. For example, the consumer's liability cannot be based solely on the fact that the transaction was made using the correct chip and PIN.
• Consumers who have experienced banking-related fraud and are not satisfied with the resolution offered should also file a complaint with their bank.
• À l’appui de son rôle d’éducation des consommateurs, l’ACFC fournit des renseignements impartiaux et factuels pour aider les consommateurs à comprendre comment se protéger contre la fraude financière et les escroqueries.
• L’ACFC surveille la conformité des entités réglementées aux règlements fédéraux en ce qui a trait aux opérations non autorisées, en particulier les transactions par carte de débit et de crédit. En règle générale, toute transaction bancaire ou par carte de crédit qu’un consommateur n’a pas effectuée ou approuvée est une transaction non autorisée.
• Les attentes de l’ACFC à l’égard des enquêtes sur les allégations de transactions non autorisées par carte de crédit et de débit sont les suivantes:
  • Les institutions financières sous réglementation fédérale doivent soupeser tous les facteurs pertinents avant de conclure que le consommateur est responsable, peu importe la méthode ou la technologie utilisée pour traiter une transaction par carte de crédit ou de débit.
  • Plus précisément, les institutions financières sous réglementation fédérale doivent mener une enquête pour déterminer si des circonstances indépendantes de la volonté du titulaire de carte (comme l’espionnage par-dessus l’épaule, la coercition, le vol de la carte ou la défaillance du système) ont donné lieu à une transaction non autorisée.
  • Les institutions financières sous réglementation fédérale ne peuvent pas compter uniquement sur les technologies d’authentification pour interrompre ou refuser d’ouvrir une enquête sur des allégations d’opérations non autorisées. Par exemple, la responsabilité du consommateur ne peut être fondée uniquement sur le fait que la transaction a été effectuée à l’aide de la puce et du NIP correspondant.
• Les consommateurs qui ont été victimes de fraudes liées aux services bancaires et qui ne sont pas satisfaits de la solution proposée devraient également déposer une plainte auprès de leur banque.

On FCAC's role in fighting fraud

• FCAC’s role as a regulator is to monitor unauthorized transactions when it comes to debit and credit cards.
• FCAC also conducts research into a variety of consumer finance-related subjects, including the incidence and impact of fraud.
• Although FCAC’s data is still being analyzed, we have preliminary findings from the 2024 Canadian Financial Capability Survey.
• According to the preliminary findings of the 2024 CFCS, 37% of Canadians have discovered that someone has used their bank or credit card number to pay for goods without their authorization (over their lifetime)
• FCAC’s Monthly Financial Well-Being Monitor shows that around 10% of survey respondents were victims of fraud or scams in the past two years.
• FCAC has been monitoring this issue and is very active in this area. We provide research insights and have been working with the Department of Finance on their legislative review. This includes Finance’s consultation paper with several consumer protection measures to tackle the risks of fraud and scams. You may wish to refer to the consultation paper for more details.

Information for consumers on recognizing and reporting unauthrized transactions

• In support of its consumer education role, FCAC provides unbiased and fact-based information to help consumers understand how to protect themselves from financial fraud and scams.
• If a bank customer thinks an unauthorized transaction was made using their card or account, or if there is a risk of this happening, they should:
  • change their passwords immediately
  • notify their bank or credit card issuer immediately
  • report any transactions they did not make or approve
• Canadians who think they are a victim of fraud should contact their local police. They can also report the incident through the Canadian Anti-Fraud Centre's fraud reporting system.
• The Canadian Anti-Fraud Centre is the federal leader in fraud protection and provides information on scams, tips to help people protect themselves from fraud, and step-by-step information for Canadians on what to do if they are a victim of fraud.
• Les Canadiens qui pensent être victimes d'une fraude doivent contacter leur police locale. Ils peuvent également signaler l'incident par le biais du système de signalement des fraudes du Centre antifraude du Canada.
• Le Centre antifraude du Canada est le chef de file au niveau fédéral en matière de protection contre la fraude et fournit des informations sur les escroqueries, des conseils pour aider les gens à se protéger contre la fraude et des informations étape par étape pour les Canadiens sur ce qu'ils doivent faire s'ils sont victimes d'une fraude.

Financial literacy strategy, consumer education and credit card debt

• FCAC strengthens the financial literacy of Canadians through collaboration with stakeholders, and through research and education.
• FCAC is the lead on the National Financial Literacy Strategy, 5-year plan to create a more accessible, inclusive, and effective financial ecosystem that supports diverse Canadians in meaningful ways.
• The National Strategy aims to advance positive financial outcomes for Canadians through changes in the ecosystem—either by removing barriers or catalyzing action—and provides a roadmap to guide stakeholders and help focus ur collective efforts.
• Helping Canadians strengthen their financial literacy and, ultimately, their financial resilience – is a responsibility shared by the entire financial ecosystem, including other regulators and government bodies, the financial services industry, the private, non-profit and community sectors, financial literacy educators, researchers, and other key players.
• Along with managing savings and expenses, managing debt is one of the key consumer building blocks of the National Strategy.
• The National Strategy also identifies 6 priority areas that will improve the financial ecosystem for consumers, including reducing barriers by:
  • communicating in ways people understand
  • building and providing for diverse needs and
  • supporting increased digital access and digital literacy
• And catalyzing action by:
  • enhancing access to trustworthy and affordable financial help
  • using behavioural design to simply financial decisions
  • strengthening consumer protection measures

Progress on the national strategy

• The National Strategy is complemented by a Measurement Plan, launched in November 2022, which is designed to track progress towards the objectives of the National Strategy.
• The Measurement Plan has been adopted so far by 31 organizations across Canada, which have shared 60 findings from 41 initiatives with FCAC. It allows the financial ecosystem to:
  • measure impact
  • identify, track, and share progress
  • collectively agree on what works and what doesn’t to adjust and scale efforts effectively

Consumer education

On the reach of FCAC's consumer information

• As part of our mandate to strengthen the financial literacy of Canadians, FCAC provides unbiased and authoritative information about financial products and services, including credit cards.
• FCAC’s consumer information and tools helps consumers make navigate the financial marketplace and make informed financial decisions.
• FCAC receives over 6.7 million visits annually to its consumer information on Canada.ca. This includes 27 pages providing consumers information on credit cards, including:
  • Credit cards and fees
  • Choosing a credit card
  • Consumer protection and credit cards
  • Managing debt and managing a credit card
  • Merchant information
• FCAC also provides free and easy-to-use online tools and calculators, such as our Credit Card Comparison Tool.
  • The Credit Card Comparison tool was launched in 2014 and currently has 220 credit cards to compare, with a variety of interest rates, fees and rewards.
• FCAC also offers a credit card payment calculator that allows users to find out how long will take to pay off their credit card and explore options to pay it back faster, including:
  • Making just the minimum payment each month
  • Making the minimum payment plus an additional amount each month
  • Paying a fixed amount each month

On the reach of FCAC's ad campaign

• On January 15, 2024, FCAC launched a national advertising campaign titled “Housing Costs on Your Mind” that ran for approximately 11 weeks.
• The campaign objective was to equip Canadians with practical tools and resources to help them confidently make informed decisions about renting or buying a home and choosing, renewing and/or paying a mortgage.
• The budget was $2 million and included traditional radio, digital audio, out-of-home, social media, digital display and search engine marketing.
• The “Housing Costs on Your Mind” campaign pages on Canada.ca received more than 1 million visits. That is, over a million Canadians accessed FCAC’s tools and resources, as well as government programs and incentives.
• On August 5, 2024, FCAC relaunched the “Housing Costs on Your Mind” advertising campaign (wave 2) with a budget of $3.5 million. The campaign is currently in market and will run until December 15, 2025.
• Previously, FCAC has run national advertising campaigns on budgeting, and managing money and debt.

Financial Literacy Month

• November is Financial Literacy Month in Canada – a month-long campaign that brings together organizations and individuals from across the country that share a commitment to advancing financial literacy.
• For the past two years, Financial Literacy Month has focused on promoting tools and resources to help Canadians manage their debt in a challenging economic environment.
• Managing debt remains one of the most important things that Canadians can do to achieve positive financial outcomes in today’s economic environment.
• The theme for Financial Literacy Month 2024 is “Talk Money”.
• This campaign will aim to destigmatize conversations about money by encouraging Canadians to talk about money with friends and family, ask questions and consult trusted financial professionals.
• This aligns with the National Financial Literacy Strategy’s efforts to Build Just-In-Time Financial Knowledge and Confidence, Navigating the Financial Marketplace and Enhance access to trustworthy and affordable financial help.
• The goals of the 2024 campaign are:
  • to promote open conversations about money and financial topics among Canadians, which contributes to increased financial confidence.
  • equip Canadians with financial tools and resources to help them manage their money and navigate the financial marketplace.
  • engage stakeholders to get involved

Research

The Canadian Financial Capability Survey

• Historically conducted at 5-year intervals, moving to 3-yr intervals starting 2024 FCAC’s Canadian Financial Capability Survey sheds light on Canadians’ knowledge, abilities and behaviours as they relate to financial decision-making and assesses how Canadians are doing on indicators of financial well-being.
• Data collected in 2024 is still being analyzed and validated for publication in 2025, but we can share some preliminary results relevant the committee’s study:
  • 46% of Canadians describe themselves as financially knowledgeable, up from 40% in 2019.
  • 52% of Canadians correctly answered a financial knowledge question about compound interest.

Behavioural Finance Lab and initiatives to enhance financial education

• FCAC’s Behavioural Finance Lab uses behavioural science and digital tools to conduct interventions and experiments to nudge consumers to make beneficial financial decisions.
• We share the results of these studies – what worked and what didn’t – with stakeholders who deliver financial literacy programs to help inform their work.
• One such study was conducted with users of Optimity, a healthy lifestyle app, from June 2022 to March 2023.
• We used behavioural science to design quizzes to provide participants with debt-relevant information, nudging those with credit card debt to improve their financial circumstances with strategies like paying more than the minimum on their credit card bills.
• Changes in debt levels, debt management strategies, financial confidence and stress levels around meeting credit card commitments were tracked over time as participants engaged with the intervention.
• While respondents in the Optimity study are not a representative sample of Canadians and data analysis is still in progress, some of the preliminary results show that participants who completed the intervention were significantly more likely to report decreases in debt over the 10-month testing period (compared to a control group).