Led by financial industry titan Prime Minister Mark Carney, Canada’s 2025 budget outlines ambitions to tackle cybercrime, embrace digital payments innovation, and encourage competition within financial services.
Open banking, stablecoins, and the Real-Time Rail
The budget outlined a clear focus on developing Canada’s core banking systems, expanding digital remittance options, and fostering competition in financial services.
The Bank of Canada will have oversight for the open banking payment initiation that will kickoff in 2027, for which $25.7 million has been allocated for oversight and security over the next five years. The government will also be releasing a consumer-driven banking framework to provide further guidance to payment service providers (PSPs).
Notably, Canada introduced rules for fiat-backed stablecoins allowing them to be used securely for digital payments and regulating PSPs that provide stablecoins.
The Real-Time Rail (RTR), Canada’s incoming instant payments system is set to launch in 2026, designed to enable 24/7 transactions.
The Retail Payments Activities Act has expanded member eligibility for Payments Canada to allow more companies to participate in Canadian core payment systems. Over 1,500 new PSPs are expected to join.
The budget also included a review of ATM, Interac (a Canadian interbank payments network), and cross-border remittance fees to enhance transparency, and proposed for investment account transaction fees to be eliminated. The process of switching primary transaction accounts for Canadian institutions will also be simplified for those looking to make a change.
Embracing innovation and fighting fraud
Another notable mention from the budget is that the National Anti-Fraud Strategy will be established to combat increasing rates of cybercrime.
Furthermore, the budget announced explorations into AI technologies for financial services, with more details forthcoming.
Canadian Minister of Finance and National Revenue François-Philippe Champagne stated in his budget announcement speech that Canada, and the world, has been experiencing a high level of uncertainty and a “true generational shift.”
He continued: “The challenges are great, but the opportunities for Canada are even greater. This budget must be generational in its ambition and serve to shape our economy and our nation’s future.”