Canada’s Commons Passes Financial Reforms

Canada’s House of Commons on Monday passed long-awaited bills designed to deregulate financial services, bring new products to consumers and boost competition among banks, insurance companies and brokerages.

The bills, five years in the planning, were approved by wide margins and were expected to be passed within days by the Senate. They would take effect early next year.

For consumers, the new laws should mean a wider choice of options and more sophisticated investment products, industry analysts and financial experts said.

The legislation allows banks to buy insurance companies and trust firms, which are similar to U.S. savings and loan companies.

Trusts are allowed the same business and consumer lending powers as banks, and insurance companies also are to receive enhanced lending authority.

Banking analyst Kersi Doodha at Maisons Placement Canada Inc. said he expects larger players will offer Canadians all the financial services they need within three years.

“They’re moving very fast on information and processing technology to back up the system,” Doodha said.

Despite years of bank lobbying, the Conservative government rejected the industry’s requests for permission to market insurance through their branches and engage in auto leasing. But the banks can still refer clients to insurance companies with which they have links.

Since 1987, five of Canada’s six major banks have acquired seven of the nation’s biggest investment firms to expand their narrow range of services.