The 2027 Canadian budget seeks to drive financial services competition while balancing growing consumer fraud concerns

The government is looking to drive competition with its new budget. Many of the changes have direct operational impacts on financial institutions while also bolstering the market positioning of new entrants. 

The core of these changes is outlined below with an emphasis on how the 2027 planning cycle may change now for financial institutions. Our overall assessment is that established financial institutions should prepare for three core things:

1. Increasing competition from both existing national peers, newer fintechs, and foreign entrants.
2. A more intense compliance and disclosure regime meant to empower consumer choice in the financial services space that also touched stablecoin issuance and AI systems consumers interact with.
3. A sped up federal charter clock for receiving a charter means that fintech competitors may not be as limited in product capabilities as before.

Payments and real-time rails

1. RTR goes live November 9. The next policy window opens in early 2027. 

• The Real-Time Rail launches November 9, and a public consultation on the next phase of payments modernization, together with the statutory review of the Canadian Payments Act, is expected in early 2027. 
• Firms that wait until the consultation paper is published will be reacting to it rather than shaping it.

2. Unauthorized-transaction losses shift to institutions, but authorized scams are still unresolved. 

• The Bank Act will cap consumer liability at $0 for transactions resulting from unauthorized account access, absent gross negligence. 
• The cap does not cover authorized push-payment scams, which are the main fraud risk on instant rails. Modelling fraud-loss exposure for RTR  should happen now, before volumes scale. 

3. Fraud becomes a legislated, cross-sector obligation. 

• Multi-Sector Anti-Fraud Framework will require financial, telecom and platform firms to prevent, detect, disrupt and respond to fraud, and to cooperate across sectors on complaints. 
• The operational gap most firms will have is data-sharing agreements and complaint workflows with telcos and platforms. 

4. PSP oversight and consumer protection are tightening. 

• RPAA amendments will strengthen the Bank of Canada’s oversight of PSPs, and harmonised consumer protection rules are being developed with the provinces. 
• Banks and credit unions should check their PSP partners’ readiness now. 
  • A partner’s compliance gap becomes the institution’s customer-experience problem.

Stablecoins

5. Banks cannot issue stablecoins from their own balance sheets.

• Federally regulated institutions must issue through non-financial-institution subsidiaries regulated under the Stablecoin Act, and the Act will extend to foreign institutions not regulated in Canada. 
• Consumer protection in an issuer or custodian insolvency is still under discussion. 
• In practice, any bank stablecoin needs its own legal entity, governance and reserves. 
  • That may push some institutions toward tokenized deposits, which the budget does not address.

Data, AI and technology spend

6. Consumer-driven banking gets no new milestones. Fee transparency does the work instead. 

• The budget commits to regulations requiring banks to give customers a single annual statement of fees paid on chequing and savings accounts. Data portability will also extend to telecom and air travel under the Protecting Privacy and Consumer Data Act. 
• The fee statement is a data-aggregation project spanning several product systems, not a disclosure template.
• Bill C-36, not the consumer-driven banking track, is now the main portability framework to watch.

7. AI governance arrives through privacy and online-safety law, not financial regulation.

• Bill C-36 adds transparency requirements on personal information used in automated systems. 
• Bill C-34 sets risk and labelling duties for AI chatbot services. 
• This affects credit adjudication, fraud scoring and customer-facing assistants. 
  • Model documentation becomes a privacy-compliance artifact, and legal teams should test whether C-34’s definitions capture their customer-facing bots.

8. Technology investment gets cheaper after tax. 

• Software is among the assets eligible for permanent immediate expensing under the Productivity Mega Deduction. 
• SR&ED expands to commercialization costs, including regulatory approvals and certifications. 
• These are both moves that look to enhance the competitiveness of newer more tech-driven players.

Consumer lending

9. Several revenue lines are under direct pressure.

• Credit cards: a consultation on applying payments above the minimum to the highest-rate balance first.
• Payday loans: a 42-day minimum term, mandatory installments and no credit insurance charges.
• Mortgages: the Bank of Canada will publish insured mortgage rates, the CRA will offer income verification, and prepayment penalty transparency is under consultation. 
• Card issuers should size the interest-revenue impact before the consultation closes. Mortgage teams should expect rate compression from published, comparable pricing.

Competition initiatives

10. OSFI gains a competition objective, and entry decisions get a clock. 

• OSFI will get a secondary competition objective, and new-entrant applications will have a one-year decision timeline. 
• This gives smaller institutions and applicants a formal basis to raise proportionality in supervisory conversations. It also makes a federal charter a realistic planning assumption for scaled fintechs. 

11. Deposit insurance changes the deposit market. 

• The CDIC limit rises to $250,000, with temporary high-balance coverage for life events and no limit on eligible registered and tax-free account deposits. Two things could potentially follow:
  • Mid-tier banks can compete more credibly for high-balance and registered-plan deposits.
  • The effect on provincially regulated credit unions depends on how their provincial deposit insurers respond. 

12. Ownership rules open the door to challenger and foreign-backed banks. 

• Foreign bank subsidiaries under $8 billion in equity are exempted from the public holding requirement, and the widely held threshold rises from $12 billion to $25 billion. 
• Credit unions get continuance guidance and more flexibility for cooperative shareholders. Incumbents should expect better-capitalized entrants. Larger credit unions now have a clearer path to a national charter. 

We will continue to carefully monitor developments around this budget, particularly where draft regulations and comment periods are still expected. Regardless, this government’s push to drive industry competition seems to be moving forward swiftly.