G. The Financial Consumer Agency of Canada

• Author: M.H. Ogilvie
• Profession: LSM, B.A., LL.B., M.A., D.Phil., D.D., F.R.S.C. Of the Bars of Ontario and Nova Scotia Chancellor's Professor and Professor of Law, Carleton University
• Pages: 69-74

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In 2001 Parliament enacted the Financial Consumer Agency of Canada Act (FCAC Act),³⁴⁵which established the Financial Consumer Agency of Canada (FCAC) in sections 1-34 and amended the other four major pieces of financial institutions legislation, including the Bank Act, in

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sections 35-592. The political symbolism of this approach is self-evi-dent: consumer protection is now officially the main purpose of all financial institutions legislation. The FCAC was set up during the course of 2002 for the general purposes of ensuring that financial institutions comply with their statutory obligations to consumers and for providing information to consumers so as to assist them in understanding and enforcing their statutory rights against financial institutions. The FCAC operates pursuant to its own Act, as well as to provisions in other financial institutions legislation that relate to it, including the Bank Act.

The FCAC is an agency of the federal government whose head is the Minister of Finance.³⁴⁶

The statutory objects of the FCAC are: (i) to supervise financial institutions in order to determine whether they are in compliance with their applicable consumer legislation; (ii) to promote the adoption of policies and procedures to implement applicable consumer legislation; (iii) to monitor voluntary codes of conduct designed to protect customers of financial institutions, provided that these have been adopted by the institutions and are publicly available; (iv) to monitor all other public commitments for the protection of customers made by financial institutions; (v) to promote consumer awareness about the legal obligations of financial institutions; and (vi) to foster an understanding of financial services and issues relating to financial services in cooperation with any other governmental or nongovernmental organization.³⁴⁷

The day-to-day operation of the FCAC is conducted by its Commissioner, who is appointed by the Governor in Council and has the rank and power of a deputy head of department.³⁴⁸

The Commissioner holds office during good behaviour for renewable five-year terms,³⁴⁹and in absence or incapacity, the Minister may appoint a qualified person to perform the duties for not more than ninety days without the approval of the Governor in Council.³⁵⁰

The duties of the Commissioner in relation to banks are set out in the FCAC Act and the Bank Act, and they mirror the statutory objects of the FCAC,³⁵¹including entering into any agreements or arrangements with other federal or provincial government agencies in order to carry

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out its objects.³⁵²

The Commissioner may appoint Deputy Commissioners³⁵³and staff,³⁵⁴to whom statutory duties may be delegated.³⁵⁵

To en-sure that the Commissioner is not in a conflict-of-interest position, the FCAC Act provides that: (i) the Commissioner may not hold any other position except another office under the Crown for no reward;³⁵⁶(ii) the Commissioner may not own any shares of any financial institution or similar business;³⁵⁷(iii) the Commissioner may borrow money from a financial institution only after first informing the Minister of Finance;³⁵⁸and (iv) the Commissioner may not receive any grant or annuity from a financial institution or any director, officer, or employee of a financial institution.³⁵⁹

The budget for the FCAC is financed by assessment against each financial institution, so as with the other supervisory bodies, the financial institutions pay for their own regulation.³⁶⁰

The Minister of Finance may also advance funds from the Consolidated Revenue Fund,³⁶¹ but as the annual financial statements show, the budget is based almost entirely on assessment.

The FCAC Act provides further for the standards to be exercised by the FCAC in carrying out its statutory mandate, as well as for penalties for those institutions assessed to be in breach of any applicable legislation. The Act provides that all information regarding the business or affairs of a financial institution or of persons dealing with it obtained by the Commissioner in the course of carrying out statutory duties is confidential and is to be treated as confidential.³⁶²

The Commissioner is entitled to disclose it, if satisfied that it will be treated as confidential, to any government or other agency or body that regulates financial institutions for regulatory purposes, to the CDIC for deposit insurance purposes, and to the Department of Finance and the Bank of Canada for purposes of policy analysis related to the regulation of financial institutions.³⁶³

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Violations or failures to comply with an order bring penalties of up to $50,000 for a person and $200,000 for a financial institution.³⁶⁴

In assessing the penalty, the following factors shall be considered: the degree of intention or negligence, the harm done by the violation, the previous five-year history of the person who committed the violation, and any other criteria that the Governor in Council may present.³⁶⁵

If a person named in a notice of violation from the Commissioner pays the proposed penalty, that person is deemed to have committed the violation,³⁶⁶and a person who ignores the notice and does not pay is also deemed to have committed the violation.³⁶⁷

Where a person makes representations, the Commissioner may decide on the balance of probabilities whether the person has committed the violation.³⁶⁸

The Commissioner is required to give notice of any decision,³⁶⁹and the person to whom such notice is given may appeal the decision to the Federal Court.³⁷⁰

The Federal Court is required to take reasonable caution to conduct its hearings in private so as to protect confidential information.³⁷¹

Any penalty is a debt due to the Crown in right of Canada,³⁷²and there is a five-year limitation period for recovery of that debt in the Federal Court...