Budget 2025 - no more registered account transfer fees | General financial discussion | Discussion forum

Lodown said
So "draft" regulations in Spring 2026. How long does it take to go from from "draft" to "law"?

"To improve choice and lower costs for financial consumers, the government has proposed measures to help Canadians switch between financial institutions and to increase fee transparency:

Budget 2025 announced that the government intends to publish draft regulations by spring 2026 to prohibit investment and registered account transfer fees, currently costing Canadians on average $150 per account.
Budget 2025 announced the government’s intention to explore improving the transparency of cross-border transfer fees, including foreign exchange costs, for banks, as non-transparent pricing is causing consumers to pay more than expected to send their money internationally.
Budget 2025 announced that the government intends to work with banks on ways to simplify the process of switching primary chequing accounts to other Canadian financial institutions.
The government has requested the Financial Consumer Agency of Canada to prepare a report on the structure, level, and transparency of fees charged by Canadian banks."

Source: https://www.canada.ca/en/depar.....y.html  

If there are no legislative changes required, the Regulation changes can be done via Order-in-Council. Typically, this requires publishing a notice in Canada Gazette Part II (https://gazette.gc.ca/rp-pr/pu.....ng.html#a2), providing a regulatory public comment period, and then the federal cabinet will set an in force date. I would expect this to be in place by the end of the spring 2026 session of Parliament, so call it June 2026. If legislative changes are needed, then I'd say end of 2026, or January 2027 at the latest.

This is a much overdue step. The banks have dragged their heels on this for over 25 years. They initially begged for voluntary commitments through the Canadian Bankers Association. Then the feds got tougher and enshrined some of the commitments into Regulations. That has proven insufficient, so the government is going to dictate to them. And so they should. Banks are not private businesses that can do whatever they want; on the contrary, they're a restricted, special type of business, requiring Minister of Finance and OSFI approvals to operate in Canada. As such, they are a public utility.

Given the affordability issues in Canada, this is an easy political win, particularly since EQ Bank and Wealthsimple are supportive, and the government is eager to curry favour with Westlake and Katchen.

Cheers,
Doug

We are paying for it even if receiving institutions reimburse the fee. Cuts down the incentive they can offer; money has to cone out of somewhere.

The practice is obviously anti-competitive. “Changing mind” about what we do with our money is our right, whether it's because someone else is providing a better service or better value. Insurance companies, shops and accountants don’t charge “you changed your mind” fees, so I don’t see why banks get away with it (other than the obvious banking oligopoly in Canada).

mordko, I guess we disagree on this one.

Of course it's your right to change your mind, but a transfer requires the institution to provide you the extra service of performing that transfer to another institution, a service they don't have to perform for clients that aren't transferring their accounts.

The shops, insurance companies, etc examples are not parallel, there's no transfer of anything to a new shop, insurance company, etc.

And oligopoly? There are more banking options than ever in Canada, you can now easily go through life and completely avoid the big 5 or 6. And in fact you can start up a bank if you want to, anyone can, no formal barriers to competition, there are several examples of groups of private investors starting up financial institutions in Canada.

But you & others want that extra account with the securities in it transfer service done for free, I get it, and the vote-seeking government has accommodated you.

It is still up to the retail client to be savvy enough to weigh all the issues, pro and con, before making a decision to enter into a relationship with a specific provider. Why should I provide a free service for a butterfly flitting off to another offer that may be temporary clickbait?

I don't agree with such transfers being a profit center but I also do not agree it should be a free service. Even for automated transfers, there still is a need for followup to be sure the appropriate regulatory boxes have been ticked and that the transfer occurred successfully.

Customers need to take some ownership and accountability for their decisions.

AltaRed said
It is still up to the retail client to be savvy enough to weigh all the issues, pro and con, before making a decision to enter into a relationship with a specific provider. Why should I provide a free service for a butterfly flitting off to another offer that may be temporary clickbait?

I don't agree with such transfers being a profit center but I also do not agree it should be a free service. Even for automated transfers, there still is a need for followup to be sure the appropriate regulatory boxes have been ticked and that the transfer occurred successfully.

Customers need to take some ownership and accountability for their decisions.  

So essentially, banks are allowed to entice customers for a 3-month promo rate, lock them into a registered account, and not required to transfer fee-free afterward when their rate goes down to >1%? Why are banks allowed to play this game?! In most cases, banks have the upper hand in charging fees as they see fit.

The primary function of these fees is to inflict a higher cost on new entrants to the business and limit competition in general. It's designed to benefit the existing banking oligopoly so the customers stick around regardless of the poor service and value they get.

It's the exact same reason switching chequing accounts is so painful in Canada. Really does not have to be like this. Countries like UK and Australia have systems which let you automatically switch all your direct debits and incoming payments when you switch an account.

And by limiting competition these banks are imposing a far, far higher cost on consumers than $150. And it's not just on consumers but on economy in general.

This is a positive development, so I assume big 5 will work very hard to bury it.

In Canada big banks are very closely intertwined with the government. Government regulates the whole industry and makes it very hard to establish a new bank in Canada. It took Questrade approximately six years to obtain its banking charter and regulatory approval to launch a Schedule 1 bank in Canada. Bank deposit insurance is government backed. They are propped by Central Bank (eg for emergency liquidity). Lots of government programs run through big banks, which is a form of subsidy. They are treated as systemically important and the taxpayer is on the hook to rescue them. Their lobby groups like “bankers association” are influencing every decision, which is why the proposed measures are likely to be buried.

Given all that, suggesting that opening the banking industry to a bit more competition = “nanny state” is the exact opposite of the real world.

And as already stated, the $150 is a cost to new entrants vs directly to consumers, so saying “I don’t care because I have a lot of money” isn’t very meaningful.

The $150 is not a cost to new entrants, it costs nothing to open an investment account at TD. Or anywhere else, far as I know. So it has no impact on their competition for my business.

And I didn't know that a big bank would be rescued by taxpayers if needed, that's new information for me.

And saying that a $150 fee is irrelevant to me is hardly evidence that I have "a lot of money", people pay that much for a restaurant meal or some groceries.

Bill said
The $150 is not a cost to new entrants, it costs nothing to open an investment account at TD. Or anywhere else, far as I know. So it has no impact on their competition for my business.

And I didn't know that a big bank would be rescued by taxpayers if needed, that's new information for me.

And saying that a $150 fee is irrelevant to me is hardly evidence that I have "a lot of money", people pay that much for a restaurant meal or some groceries.  

Nobody pays $150 out of pocket. Companies which try to attract customers with better offerings are forced to compensate this fee; otherwise nobody would go through all the trouble of moving.

So, if you are a new entrant in the market with an awesome product but zero existing clients and people are joining your offering in droves, you are being forced to pay millions to increase profitability of big banks with bad products which people are leaving. Its a measure designed to limit competition.

You didn’t know you are on the hook to rescue “systemically important” big banks? Well, now you do.