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The CBA is grateful for the opportunity to contribute to the government’s upcoming budget. As the voice of more than 60 domestic and foreign banks, we advocate for public policies that contribute to a sound and safe banking system that helps drive Canada’s economic growth and prosperity. For more information on banks’ contribution to Canada’s economy, please visit cba.ca.
Recommendation 1 – Combatting frauds and scams
Financial crimes, including scams, identity theft, and account takeovers, pose a growing threat to Canadians. Often linked to organized criminal networks, financial crimes operate beyond national borders. Reported fraud incidents have doubled over the past decade, with losses exceeding $704 million in 2025, up nine percent from 2024. Due to significant underreporting, total annual losses are estimated to surpass $13 billion. These trends underscore the urgent need for stronger, coordinated action to protect Canadians and maintain trust in the financial system.
In response, the CBA is collaborating with approximately 50 public and private sector partners, including regulators, financial institutions, telecommunications providers, law‑enforcement, and digital platforms through the Canadian Anti‑Scam Coalition (CASC) to advance coordinated education, awareness, and prevention initiatives. While these efforts are essential, effective enforcement and prosecution are equally critical to deter criminal activity by holding criminals accountable under the Criminal Code of Canada and prevent further victimization.
An effective strategy should centralize financial crimes reporting flows between the Canadian Anti‑Fraud Centre (CAFC) and law enforcement, strengthening intelligence‑sharing to support investigations. It should also balance the protection of Canadians’ personal information with organizations’ ability to detect and prevent financial crime, including through appropriate confidentiality safeguards for cross‑sector information sharing that support investigations.
Fraud and scams are increasingly transnational, as highlighted at the recent United Nations INTERPOL Global Fraud Summit. Fraud has evolved into a global, organized, and technologically enabled criminal economy that no single jurisdiction, sector, or stakeholder can address alone. Thus, stronger global cooperation based on effective principles is increasingly necessary to combat fraud.
To tackle fraud and scams, a comprehensive, lifecycle approach is required; spanning prevention, detection, enforcement, and prosecution. The proposed National Anti‑Fraud Strategy, announced in Budget 2025, is a critical step toward a unified, cross‑sectoral response. Building on CASC’s work, the strategy strengthens collaboration across sectors (e.g., financial institutions, technology companies, telecommunications providers) and supports enhanced international coordination.
As a supporting measure, in 2024 the federal government committed to implement a tool through Canada Revenue Agency to fight mortgage fraud through income verification by early 2025.
Recommendation: Ensure a coordinated, nationwide strategy to combat financial crimes by:
- Strengthening and operationalizing centralized reporting through the CAFC, with direct integration into law‑enforcement workflows
- Supporting the Financial Crimes Agency with specialized career streams and increased investment in training and resources to strengthen expertise in combating complex financial crimes
- Expanding public education to empower Canadians
- Advancing coordinated, multi‑sector efforts involving telecommunications and digital platforms
- Permitting investigation confidentiality and flexibility of privacy frameworks to address financial crime risks
- Supporting international coordination to combat sophisticated scams and fraud schemes
- Implementing taxpayer‑consented income verification to combat mortgage fraud, with potential to expand to other financial products
Recommendation 2 – Strengthening the AML/ATF framework
As important stakeholders within the national Anti‑Money Laundering/Anti‑terrorist Financing (AML/ATF) framework, banks devote significant resources to their AML/ATF programs, internal controls, and employee training, with a strong focus on continuous improvements to respond to evolving threats. Banks also play a leadership role in public‑private partnership projects with FINTRAC, helping generate indicators to guide the reporting of suspicious transactions for all reporting entities across the system.
Canada’s AML/ATF regime should continue to evolve into a fit‑for‑purpose framework that more effectively targets money laundering and terrorist financing risks. The financial crime environment is rapidly changing. Criminal networks are increasingly sophisticated, technology is advancing and geopolitical dynamics are fluid. The AML/ATF regime must be ready to respond to these challenges.
Recommendation: Drive further demonstrable success, including increased prosecutions for money laundering and terrorist financing offences by:
- Reviewing and modernizing the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). Areas of suggested focus include suspicious transaction reporting, threshold‑based reporting, and client due diligence requirements to better align regulatory obligations with risk‑based priorities
- Introducing clear accountabilities and performance management practices to drive and monitor efficiency, effectiveness, and outcomes
- Designating an agency (e.g., the Financial Crimes Agency) responsible for central coordination of the AML/ATF regime
- Exploring opportunities to enhance sector‑specific supervision given the large, heterogenous community of reporting entities under the PCMLTFA
- Ensuring non‑compliance penalties under the PCMLTFA are proportionate, reflect Canada’s market and compliance context and are applied fairly, transparently and predictably within a risk-based framework
- Enhancing public‑to‑private information sharing through targeted safe harbour and confidentiality legislative amendments to enhance financial intelligence and increase focus on emerging risks
Recommendation 3 – Adjusting the prudential capital framework
Ensuring the Office of the Superintendent of Financial Institutions’ (OSFI) capital requirements are reasonable and risk‑based is essential to allow banks to flow capital to individuals and businesses to support jobs and economic growth in Canada and to compete effectively both domestically and internationally. As capital rules in other major jurisdictions evolve, it is critical that OSFI remains flexible and consider their effects at home.
We appreciate the changes proposed to OSFI’s 2027 Capital Adequacy Requirements Guideline including the proposed reduction in risk weight for SME exposures under the framework’s standardized approach to 75 (from 85) percent. We believe there are additional measures that could be implemented to further support small business lending and commercial credit in Canada as highlighted in our recommendation below.
Benefits of a more balanced prudential framework include more capital available for SMEs, defence and national security sector and productivity boosting investments.
Recommendation: Ensure Canada’s prudential capital framework remains reasonable, risk‑based, and boosts access to credit by:
- Increasing the firm‑size adjustment scalar under the Internal Ratings‑Based Approach
- Raising the maximum aggregated limit for retail Small Business Entity exposures
- Lowering risk weights for both direct and indirect investments in Canadian venture companies
- Recognizing all federal loan guarantees as zero risk‑weighted
Recommendation 4 – Undertake a corporate tax system review
Canada’s productivity has declined significantly, falling from sixth place among Organisation for Economic Co‑operation and Development (OECD) countries in 1970 to 18th in 2022, now ranking second‑last among G7 peers. Productivity levels are approximately 30 percent lower than in the U.S., more comparable to lower‑income states rather than innovation hubs like California or New York. Consequently, Canada risks wage stagnation, pressure on public services, higher production costs, and diminished global competitiveness.
Tax policy is an economic lever; however, sector‑specific taxes can distort capital allocation, divert investment away from its most productive uses; and discourage work, savings, and investment. We were encouraged by the Prime Minister’s campaign promise to review Canada’s corporate tax system particularly as Canada lags its peers in key growth‑enhancing investments, including machinery and equipment, and intellectual property. According to the OECD, business investment per worker in Canada declined by 15 per cent between 2014 and 2023, while increasing by 21 per cent in the U.S. and 11 per cent among OECD countries.
Sector‑specific taxes on the financial services industry constrains growth and productivity by limiting lenders’ capacity to support businesses, limiting Canadians’ ability to save and invest, and discouraging foreign investment. Examples include:
- Removal of the Dividend Received Deduction, affecting over 3 million Canadians holding market‑linked GICs and Notes, often middle‑class households nearing retirement
- The 2022 Financial Institutions Tax and the Canada Recovery Dividend reduced retained earnings, each dollar equating to more than $7.5 in foregone lending capacity, and contributed to $11.6 billion of foreign divestment from Canadian banks in 2023
- Provincial capital taxes, which reduce retained earnings and penalize prudential capital buffers, alongside Québec’s Compensation Tax, which discourages job creation and economic growth
- Retroactive sales taxes on payment clearing services, which undermine the tax system’s predictability, certainty, fairness, and investor confidence
Recommendation: The federal government undertake its commitment to review the corporate tax system, including reviewing the removal of sector‑specific taxes on the financial sector, to enhance competitiveness, attract capital, create jobs, and strengthen long‑term prosperity.
Recommendation 5 – Modernize registered account transfers process
Budget 2025’s announcement to prohibit fees on fund transfers across different accounts and institutions, require timely transfers of funds, and mandate for clear disclosures of the transfer process presents an opportunity to modernize Canada’s account transfer system to benefit all Canadians. This includes standardizing transfer procedures, improving security, and harmonizing regulations across the entire account transfer system, extending beyond banks, to deliver a consistent and seamless experience for investors.
Currently, regulations and procedures vary across the account transfer system, which includes provincially‑regulated entities (e.g. investment dealers, mutual fund dealers, credit unions and caisses populaires, trust companies, insurance companies which are an important part of the investment and registered plan market). Without a coordinated national approach, there is risk of creating a fragmented, two‑tiered regulatory framework that undermines competition, confuses clients, and reinforces the patchwork of transfer tools, standards and processes.
The federal government is considering use of regulation‑making authorities in the Bank Act to prohibit investment and registered account transfer fees. This approach would limit the number of institutions captured by this prohibition and limit the number of Canadians that would benefit from this policy change. The Income Tax Act is a better vehicle to prohibit the registered account transfer fees because it would extend to all registered plan providers. The federal government can then work with the provinces and regulators such as the Canadian Investment Regulatory Organization to address investment account transfer fees and processes.
Recommendation: Leverage the Income Tax Act to prohibit financial institutions from charging transfer fees on registered account plans by updating the conditions of registration with the CRA to prohibit charging of transfer fees at the registered‑plan level as well as implementing institution‑level penalties for those financial institutions that continue to charge fees on existing plans. Work with provincial counterparts and regulators to ensure these reforms are coordinated and applied consistently across all types of financial institutions.
Recommendation 6 – Reduce internal trade barriers for financial services
The CBA is encouraged by Canada’s momentum in reducing internal trade barriers. The International Monetary Fund (IMF) estimates such barriers are equivalent to an average annual tariff of nine per cent, with costs largely concentrated in the services sector. These inefficiencies ultimately undermine productivity, competitiveness, and economic resilience. The IMF also highlights that finance, transportation, and telecommunications are critical enablers of economy‑wide efficiency, innovation, and competition.
Furthermore, fragmented regulatory regimes can lead to inconsistent product offerings and reduce operational efficiencies for entities operating across Canada. Accordingly, the CBA supports eliminating duplicative, overlapping, or fragmented requirements in favour of harmonized framework that promote clear, consistent rules nationwide, streamlined compliance, and greater economic productivity.
Recommendation: In alignment with the objectives of the Canada Free Trade Agreement, we recommend:
- Enhancing federal‑provincial coordination on AML/ATF to avoid duplication of efforts. Regulatory and supervisory requirements should remain constituted at the federal level, while the provinces should support federal tools (e.g., beneficial ownership information) and invest in enforcement and prosecutions
- Advancing federal‑provincial alignment on privacy definitions and requirements to ensure consistent obligations, clear rights for Canadians nationwide, and streamlined compliance; supporting greater consumer choice and access to innovative products and services (e.g., consumer‑driven banking, AI)
- Encouraging provinces to support and adopt a federal framework for payment services providers engaged in bank‑like activities to ensure consistent compliance obligations and consumer protections
- Coordinating provincial approaches to over‑the‑counter (OTC) derivatives participation fees to prevent duplicative charges by multiple provincial securities regulators for the same transactions, preserve market liquidity, and ensure that fees in Canada are proportionate to the size of its OTC derivatives market relative to its international peers
Conclusion
The CBA appreciates the opportunity to contribute to the upcoming budget. Our recommendations are intended to help build Canada’s future by fostering investment and innovation, strengthening communities, and enhancing our economy’s resilience.
We welcome the opportunity to discuss our recommendations further and explore collaborative efforts to deliver benefits for Canadians.