The Canadian financial system sits on the cusp of a transformation that could fundamentally change how millions of people interact with their money. Last month, the Financial Data and Technology Association (FDATA) North America submitted a comprehensive pre-budget proposal to the House of Commons Standing Committee on Finance, pushing for open banking implementation to be prioritized in Canada’s 2025 federal budget.
For years, Canadians have been promised open banking – a system where consumers can securely share their financial data with authorized third parties. Yet while other countries race ahead with implementation, Canada’s approach has been characterized by what many industry insiders call “consultation fatigue.”
“We’ve been studying open banking since 2018,” says Steve Boms, Executive Director of FDATA North America. “Meanwhile, consumers continue using unsafe screen-scraping methods to access innovative financial services, and Canada falls further behind global peers.”
The proposal isn’t just about keeping pace internationally. At its core, open banking addresses a fundamental power imbalance in Canada’s financial landscape. Currently, big banks effectively control customer data, creating what FDATA describes as an “unhealthy competitive dynamic” that limits innovation and consumer choice.
What makes this proposal particularly significant is its timing. With the Department of Finance’s Abraham Tachjian leading an open banking implementation effort with a deadline in early 2025, the FDATA’s budget recommendations aim to ensure the initiative doesn’t lose momentum during the critical transition period.
The budget proposal focuses on four key areas: financial support for system implementation, expanded oversight for the Financial Consumer Agency of Canada, clear legislative frameworks, and resources for regulatory coordination.
But perhaps the most revealing aspect is the emphasis on data rights. The association has called for a “Consumer Financial Data Right” that would give Canadians explicit ownership of their financial information – potentially shifting the balance of power away from traditional banking institutions.
For Canadian fintech entrepreneurs like Janet Morrison, who founded a personal finance app in Toronto last year, these changes can’t come soon enough. “We’re building cutting-edge technology, but without proper data access frameworks, we’re fighting with one hand tied behind our back,” Morrison told me recently. “Every day of delay means Canadian consumers miss out on services that people in the UK and Australia already take for granted.”
The economic case appears compelling. A report from EY suggests open banking could add billions to Canada’s GDP through increased financial inclusion, reduced fraud, and stimulated competition. The FDATA proposal emphasizes these benefits, noting that proper implementation could create thousands of jobs in the financial technology sector while giving consumers better tools to manage their finances.
The banking establishment has been cautiously supportive in public statements, though industry observers note their private lobbying often focuses on slowing implementation timelines. Canada’s Big Six banks have cited security concerns and implementation costs, while consumer advocates counter that the real issue is protecting established market dominance.
What sets this proposal apart from previous efforts is its comprehensive approach to governance. Rather than treating open banking as merely a technical implementation, FDATA emphasizes the need for ongoing oversight, consumer protection, and competitive balance.
“Open banking isn’t just a one-time technology rollout,” explains Kirsten Thompson, a technology and data governance lawyer at Dentons. “It requires a sustained ecosystem with clear rules, liability frameworks, and ongoing supervision. The FDATA proposal addresses these governance aspects quite thoroughly.”
For ordinary Canadians, the implications of open banking extend beyond financial apps. The proposal suggests it could fundamentally improve financial inclusion for underserved communities, help small businesses access capital more easily, and give consumers better tools to manage household finances – particularly important as inflation and housing costs remain persistent challenges.
Perhaps the most striking element of the proposal is how it positions open banking not as a specialized financial service initiative but as essential digital infrastructure for Canada’s economic future. By framing open banking as fundamental to financial innovation rather than an optional add-on, FDATA makes a compelling case for prioritization in the budget.
The proposal comes as Canada’s financial technology sector shows increasing signs of frustration with the pace of regulatory change. Several Canadian fintech startups have relocated operations to more favorable jurisdictions like the UK, citing regulatory clarity as a primary motivation.
Behind the technical details lies a fundamental question about financial data ownership. Should banks maintain privileged control over customer transaction data, or should consumers have the explicit right to share their information with trusted providers? The FDATA proposal firmly takes the latter position.
As the Standing Committee considers this and other pre-budget submissions, the technical details may evolve, but the underlying tension remains: Canada must decide whether it wants to lead or follow in the digital transformation of financial services. The 2025 budget could well determine which path the country takes.
