The Department of Finance has proposed amendments to the Canadian Payments Association By-law No. 6 — Compliance, under the Canadian Payments Act. These amendments aim to make compliance procedures under Payments Canada more updated and efficient, particularly for simple or uncontested contraventions, while ensuring that penalties remain meaningful and proportionate to today’s financial environment.

Payments Canada, operating as the Canadian Payments Association, plays a central role in Canada’s financial system by managing national systems for payment clearing and settlement. Membership in Payments Canada is limited to entities that meet the eligibility and compliance requirements set out in its by-laws and rules. These rules govern critical elements such as settlement timelines, participation obligations, and security standards. When members fail to comply with these rules—such as through operational or procedural lapses—a contravention occurs. Under the current system, the investigation and enforcement processes outlined in By-law No. 6 are lengthy and burdensome, often involving multiple procedural layers and mandatory hearings, even for minor or uncontested issues.

To address these inefficiencies, the Department of Finance proposes a set of targeted amendments designed to improve compliance investigations. The most significant change is the introduction of an expedited process that allows the President of Payments Canada to conduct investigations directly when the alleged contravention is straightforward or uncontested. Currently, all potential contraventions are referred to committees, which must establish a compliance panel and hold hearings unless waived by agreement. The proposed reform would enable the President to assess simpler cases without a committee referral, considering factors such as the issue’s complexity, the potential harm, and the member’s prior compliance record.

Importantly, procedural safeguards would remain intact. Members would retain the right to an impartial process and could seek an independent review by a compliance panel if they disagree with the President’s findings. The compliance panel, in such cases, would have full authority to review evidence and issue its own decision. The President would also maintain the discretion to refer matters to a committee at any point if the case turns out to be more complex than initially assessed.

Another key element of the proposed amendments is the adjustment of the maximum monetary penalty for contraventions from $250,000 to $1,000,000. The current penalty limit has been unchanged since 1998 and is now considered insufficient to deter non-compliance or reflect the scale of modern payment operations. The proposed increase aligns the penalty with inflation and improves its deterrent value while maintaining flexibility for Payments Canada to apply lesser sanctions—such as reprimands or suspension of rights—when appropriate.

Canada (Proposed) October 14, 2025
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