The proposed Non-Financial Activities (Foreign Banks) Regulations would establish conditions governing the non-financial activities of foreign banks operating in Canada and the investments they may hold in Canadian entities. Developed by the Department of Finance under the Bank Act, the regulations would establish financial limits, reporting requirements, exemptions and transitional arrangements for foreign banks and entities associated with them.

The proposal defines non-financial activities, entities engaging in non-financial activities and majority financial services entities. It also clarifies that a foreign bank’s group includes only foreign banks and entities associated with the foreign bank. These definitions establish which activities, entities and financial relationships are subject to the proposed requirements.

The regulations would impose limits on revenue derived from non-financial activities and specified financial services entities. For groups with aggregate equity below $12 billion, the combined revenue from covered activities could not exceed the lesser of $1.5 billion and 15% of the group’s annual revenue. For groups with aggregate equity of $12 billion or more, the percentage limit would fall to 10%, while the $1.5-billion ceiling would remain. Groups could calculate annual revenue using either their most recent annual financial statements or the average of their three most recent financial years.

Authorized foreign banks would face an additional restriction: revenue from their own non-financial activities could not exceed 10% of their annual revenue. This requirement would apply alongside the group-wide limits.

A separate investment limit would restrict the combined value of certain ownership interests, outstanding loans and guarantees involving Canadian entities. These amounts could not exceed the lesser of $1.5 billion and 10% of the group’s aggregate regulatory capital. The calculation would exclude specified holdings, loans and guarantees involving federal financial institutions. Regulatory capital would be calculated by subtracting goodwill from members’ and shareholders’ equity, minority interests and subordinated indebtedness reported in financial statements.

Groups with aggregate equity of at least $12 billion would also face detailed disclosure requirements. Within 30 days of acquiring control of, or a substantial investment in, a covered entity, they would have to provide information about the transaction, ownership interests, business activities, strategic objectives and relevant relationships with competitors. Annual reporting would describe non-financial activities, majority financial services entities and the calculations used to demonstrate compliance. Submitted information would be confidential.

Canada (Proposed) October 20, 2026
Disclaimer: Insights are for informational purposes only and does not reflect RRI’s official position or constitute legal opinion.