Episode 35: CP Act consultation results

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Transcript of the recording

Elizabeth (Liz) Dempsey:
Hi everyone, and thanks for joining us for another episode of The PayPod. I'm your host, Liz Dempsey, and today I'm joined by our Director of Policy at Payments Canada, Lisa Sattler. We're talking about expanded membership and the Canadian Payments Act. Welcome, Lisa!

Lisa Sattler:
Thanks Liz.

Liz Dempsey:
Thank you, Lisa, so let's start with this. In February, we issued a public consultation on our proposals for the Canadian Payments Act, which expands membership to Payments Canada, and then eligibility to participate in our systems. Can you tell us why we issued a public consultation on our proposals?

Lisa Sattler:
The Canadian Payments Act establishes who can be members of Payments Canada. From that membership, Payments Canada's system by-laws set out who is eligible to apply for participation in each of our three systems, Lynx, ACSS and the future RTR. So each of our systems has distinct access models, and their requirements for direct participation in a given system might vary. Participants have to meet technical, operational and other risk related requirements as set out in Payments Canada's by-laws and rules. This latest consultation set out proposals around how each of our new member categories may be eligible to participate in each of our systems, and some of the additional consequential changes in relation to those new members. As a public purpose entity, it's really important for Payments Canada to take into account the views of members and stakeholders when establishing how the new membership categories fit within each of our systems, and that's why we consult with the public.

Liz Dempsey:
Thanks Lisa and access and membership are very hot topics right now, especially with the Retail Payments Activities Act and PSP (payment service provider) regulation. Can you tell us a little bit about the level of engagement with this public consultation in particular, in comparison to others we've issued in the past?

Lisa Sattler:
So for this consultation, we received 16 responses, and that represents hundreds of organizations, because some of those responses were provided by trade associations with large membership bases, so pretty comparable to what we've done in past consultations. We were really happy to see broad current and future member base responses, responses from stakeholders, banks, credit unions, clearing houses, payment service providers and consumer groups. So we really got valuable input from all of our interested members and stakeholders.

Liz Dempsey:
Great. And can you give us any highlights and insights into those responses, what were some of the common themes, and did anything surprise you? 

Lisa Sattler:
So by the time we get to that public consultation phase, our goal is really to have no surprises. So as we lead up to the consultation phase and we're developing our policy proposals, we like to work with some targeted members and stakeholders to consider their views in advance, and understand the implications to them so we can incorporate those preliminary views into our policy proposals before we finalize them for a broader public consultation. In the months leading up to this consultation, we did engage a number of interested organizations, and we were able to incorporate some of that valuable preliminary feedback in advance of the broader consultation. I think that targeted engagement coupled with a general support and excitement for expanded membership resulted in really strong support for each of the proposals in the consultation paper. Many of the submissions spoke to the importance of membership expansion in enabling things like competition, innovation and better services for Canadians.

Liz Dempsey:
And my last question before we go, so what happens next?

Lisa Sattler:
We're currently working on drafting instructions to inform the by-law amendments that are needed to support expanded membership. The process to amend our by-laws involves us working really closely with the Department of Finance, the Department of Justice and the Bank of Canada, as well as our membership. We'll also need to continue to work on the related consequential rule amendments to support those policy proposals that are in the consultation paper. So a key example of this is refining the definition of affiliated participants in our Automated Clearing Settlement System rules to ensure that risk is appropriately managed within that system. We're also eagerly awaiting the establishment of the coming into force state of the changes to our legislation, which is a necessary step before onboarding new members and prospective participants.

Liz Dempsey:
Lisa, thanks so much for joining me today. Definitely exciting times for policy and the future of Payments Canada by-laws.

Lisa Sattler:
Thank you. Liz, my team certainly thinks so too.

Liz Dempsey:
Before we go, I hope you'll join us at The SUMMIT, our annual payment conference happening this year, May, 6, 7 and 8 in Toronto, where we'll keep the membership and access conversation going, ending the event with a special three hour deep dive session on day three dedicated to policy, rules and regulation. I'm Liz Dempsey thanks for joining us on this episode of The PayPod.