2026 Spring Economic Update: Key Impacts on Canada’s Financial Sector

Introduction

On April 28, 2026, the federal government released the 2026 Spring Economic Update, followed by the tabling of Bill C-30, the Spring Economic Update 2026 Implementation Act. Together, they introduce several new measures aimed at updating financial institution legislation, regulating digital assets and combating financial crimes.

Stablecoins

Following the passage of the Stablecoin Act in March, the Spring Economic Update announces that the government plans to engage with federally regulated financial institutions to evaluate the development, potential use and regulatory clarity required for stablecoins and other tokenized assets. Regulated financial institutions are currently excluded from the scope of the newly enacted Stablecoin Act. Targeted discussions are also expected with provincial regulators, given the importance of harmonized treatment of stablecoins federally and under provincial securities laws.

Broader Investment Powers for Banks

The Spring Economic Update signals that the government will bring forward regulations allowing federally regulated financial institutions to make a broader range of investments to improve financial services, in an apparent reference to the fintech investment powers under the Bank Act that were enacted in 2018 but are not yet in effect.

Enhanced FINTRAC Powers

The Spring Economic Update states that the government intends to introduce new powers for the Minister of Finance to issue directives under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) regarding national security and the integrity of the financial system. The Minister currently has authority to issue jurisdiction-specific directives requiring reporting entities under the PCMLTFA to apply enhanced measures for transactions involving these jurisdictions. Directives are currently issued in respect of Iran, North Korea and Russia.

The Spring Economic Update also signals that FINTRAC’s ability to refuse or revoke registration of money services businesses (MSBs) will be enhanced, although no specific measures are announced. In practice, FINTRAC has become increasingly willing to revoke MSB registrations, including in response to administrative deficiencies, although FINTRAC’s current ability to refuse registration remains limited and generally confined to a narrow set of ineligibility criteria. Additional measures announced include increasing criminal record checks for MSBs and introducing new disclosure requirements when an MSB expands its business and service offerings. The government will also ban the operation of crypto ATMs.

These new measures were not included in Bill C-30 and will have to be introduced in future legislation.

New Financial Crimes Agency

Following the announcement in Budget 2025, the government introduced Bill C-29 to establish the Financial Crimes Agency. The new independent agency will have police powers and civilian leadership, and report to the Minister of Finance. The agency will have a mandate to lead investigations into major capital markets crimes, serious fraud and money laundering, as well as recovering the proceeds of crime. The agency will be staffed with specialized personnel equipped to tackle sophisticated financial crimes.

Anti-Fraud Strategy

The Spring Economic Update highlights the launch of a whole-of-government National Anti-Fraud Strategy to protect Canadians from increasingly complex and evolving financial scams. On March 30, 2026, the government launched a public consultation on measures that would strengthen market-conduct requirements for banks, telecommunication providers and digital platforms, to prevent, detect and respond to fraud losses.

The government also proposes working with stakeholders and financial institutions to establish a voluntary Code of Conduct for the Prevention of Economic Abuse.

Update to the Foreign Bank Investment Framework

Bill C-30 introduces amendments to the Bank Act that will narrow the broad exemption available to foreign banks from the Investment Canada Act (ICA) review. Under the revised framework, investments by foreign banks and affiliates will be exempt from ICA review only when the investment triggers approval under the Bank Act or other federal financial institutions legislation. This amendment is slated to take effect 120 days after Bill C-30 receives royal assent.

Bank of Canada Cost Recovery Regime

Over the past few years, the Bank of Canada has become a key regulator in the Canadian financial services sector. In addition to its role as Canada’s central bank, it is charged with overseeing the Retail Payment Activities Act and the Payment Clearing and Settlement Act regulating payment service providers and designated prominent payment systems. The Bank of Canada will also be tasked with overseeing the newly enacted Stablecoin Act and the Consumer-Driven Banking Act. The Bank of Canada will operate on a cost-recovery basis in respect of these legislative frameworks and will assess annual fees to regulated entities. Bill C-30 introduces new legislative measures for calculating cost allocation among entities regulated by the Bank of Canada.

For more information on these measures, please contact the authors or any other member of our Financial Services Regulatory group.