Do you know who controls your money? What rules are in place and what recourse do you have if someone breaks those rules? Have you ever wondered why your bank has so many divisions—insurance, mortgage, self-directed brokerage, full-service brokerage and wealth management?
Canada has 14 government jurisdictions: one at the federal level plus one for each of the ten provinces and three territories. Our constitution granted authority for banking to the federal government, and determination of civil law to the provinces. That’s why Quebec can use a different legal system, the Civil Code of Quebec (adapted from France’s civil law), while the rest of Canada uses common law (from Britain).
This also led to each province and territory having the right to govern and regulate the securities industry and share jurisdiction over life and health insurers. The result is a mix of federal and provincial rules and regulations being applied differently and enforced inconsistently across Canada.
The federal, provincial and territorial governments enact legislation in their areas of jurisdiction. There are separate acts for banks and trust companies, credit unions, insurance companies and the securities industry.
Regulatory bodies, under the finance ministry of each jurisdiction, provide guidance and enforce the rules and regulations under their jurisdictions. The ten provincial and three territorial regulators have formed associations to coordinate and harmonize regulations across Canada. They are the:
Ombudsman services provide information, answer questions and direct consumers to assistance when they have complaints or concerns about a financial services provider. Complaints at a provincial/territorial level may be filed through your provincial and territorial ombudsman.
The graphic below illustrates the regulatory oversight framework for financial services in Canada at the federal and provincial/territorial levels.