Vol. 146, No. 26 — December 19, 2012
Registration
SI/2012-99 December 19, 2012
JOBS AND ECONOMIC GROWTH ACT
FINANCIAL SYSTEM REVIEW ACT
Order Fixing the Day on which this Order is registered as the Day on which Certain Sections of the Act Come into Force
P.C. 2012-1623 December 6, 2012
His Excellency the Governor General in Council, on the recommendation of the Minister of Finance,
- (a) pursuant to section 2136 of the Jobs and Economic Growth Act, chapter 12 of the Statutes of Canada, 2010, fixes the day on which this Order is registered as the day on which sections 1894 to 2135 of that Act come into force; and
- (b) pursuant to subsection 225(2) of the Financial System Review Act, chapter 5 of the Statutes of Canada, 2012, fixes the day on which this Order is registered as the day on which sections 9 to 11 and 207 and subsection 217(2) of that Act come into force.
EXPLANATORY NOTE
(This note is not part of the Order.)
Proposal
To fix the date of registration of this Order as the date on which sections 1894 to 2135 of the Jobs and Economic Growth Act, and sections 9 to 11 and 207 and subsection 217(2) of the Financial System Review Act, come into force.
Objective
To bring into force the legislative provisions required to implement the federal credit union legislative framework.
Background
To promote the continued growth and competitiveness of the financial sector and enhance financial stability, the Government of Canada introduced a legislative framework, as part of the Jobs and Economic Growth Act, amending the Bank Act and other federal acts to enable credit unions to incorporate and continue federally. The legislative model is based on the framework applicable to banks. The model weaves in unique cooperative elements for federal credit unions and establishes transitional elements to facilitate the migration of credit unions to federal jurisdiction. Legislative amendments embed internationally recognized cooperative principles for credit unions, including the following: each member has one vote; services are primarily for members; and membership is open but bonds of association (e.g. based on a common workplace) are permitted.
The Financial System Review Act made minor technical amendments to the financial institution statutes to clarify that certain provisions applied, or did not apply, as the case may be, to federal credit unions.
To implement the federal credit union legislative framework, a set of regulations is required. These regulations include consequential amendments to the Bank Act regulations to adapt the existing framework to allow for cooperative ownership, as well as a series of substantive regulations pertaining to demutualization, deposit insurance disclosure, the payments framework and disclosure to members on the issuance of investment shares.
The coming into force of the federal credit union legislative provisions were delayed until the necessary regulations had been made. Those regulations come into force on the same day as the legislative provisions.
Implications
Along with accompanying regulations, the legislative provisions provide the legal and regulatory framework to allow a provincial credit union to continue to a federal charter.
Bringing these provisions into force delivers on the Government’s commitment in Budget 2010 to create a federal credit union framework.
Consultation
Throughout the development of the legislation and regulations, the Department of Finance consulted key stakeholders in the credit union system, including provincial governments, individual credit unions, provincial credit union centrals, national centrals, financial sector associations and federal agencies. In addition, draft regulations were published for public comment in the Canada Gazette, Part Ⅰ, for a 30-day comment period. During the public consultation period, certain credit union stakeholders indicated an eagerness to have the relevant legislative and regulatory framework come into force.
Contact
Jane Pearse
Director
Financial Institutions Division
Financial Sector Policy Branch
Department of Finance
Telephone: 613-992-1631