Consumer protection in Canada: where we are and where we’re going

Provincial consumer protection frameworks

Over the past few years, several provinces have enhanced their consumer protection legislation. Specifically, Ontario, New Brunswick and Québec have revamped their consumer protection legislation, while British Columbia has introduced targeted measures to enhance consumer disclosures and regulate subscription agreements.

Ontario

In Ontario, proposed changes to the Consumer Protection Act (the New Ontario CPA) introduced in 2023 will streamline the province’s approach to contractual disclosure by establishing general requirements that apply to all contracts for future performance, direct contracts, and contracts entered when the consumer and supplier are not present together, including internet contracts (in contrast to previously having separate requirements for each category). This move makes the legislation more clear and cohesive for consumers. The New Ontario CPA will also expand protections around unconscionable representations, cancellation rights where an unfair practice has occurred, and the obligations of a supplier when providing information to a consumer. Penalties for contravention will increase, with maximum fines doubling to $100,000 for individuals and $500,000 for corporations.

The New Ontario CPA has not yet come into force and regulations, which will provide the most anticipated details of the changes, remain forthcoming.

As of January 1, 2025, regulations to Ontario’s Payday Loans Act have limited dishonoured payment fees to $20, in line with the Criminal Code limits described below.

New Brunswick

Unlike Ontario, New Brunswick did not previously have a standalone consumer protection act. Instead, consumer protection was governed by a patchwork of legislation, including the Cost of Credit Disclosure and Payday Loans Act, the Credit Reporting Services Act, the Direct Sellers Act and the Gift Cards Act. The proposed New Brunswick Consumer Protection Act (NB CPA) consolidates the relevant provisions into one statute and introduces new requirements generally applicable to consumer agreements—and, like Ontario’s amendments, it makes consumer protection legislation more accessible and transparent. The NB CPA introduces rules for high-cost credit products and, in line with the New Ontario CPA, introduces new prohibitions against unfair practices. The NB CPA will also regulate loyalty programs, aligning the province with Ontario and Québec.

Like the New Ontario CPA, the NB CPA has not yet come into force and regulations remain forthcoming.

British Columbia

In British Columbia, recent amendments to the Business Practices and Consumer Protection Act prohibit suppliers from including terms that preclude a consumer from (a) commencing or becoming a member of a class proceeding or requiring that a dispute be submitted to arbitration; and (b) posting a related review on the internet. Additional proposed amendments will, once in force, introduce requirements for subscription contracts with automatic renewals and revamp disclosure requirements for future performance, time share, direct sale, and distance contracts. Provisions in subscription contracts that provide for automatic renewal will also be required to include specified terms addressing renewal.

Québec

Several significant amendments to the Québec Consumer Protection Act (QCPA) came into force on August 7, 2025, as part of the phased implementation of Bill 72.

Among the most significant changes is the revised method for calculating credit rates (a concept similar to the annual percentage rate). Under the new framework, only annual credit card membership fees may be excluded from the disclosed credit rate. Monthly membership fees are now effectively prohibited. In contrast, financial institutions are now permitted to recover certain costs from consumers, such as those incurred due to a refused cheque or failed fund transfer, provided the financial institution is not responsible for the issue.

Bill 72 also introduces a new set of requirements governing amendments to certain provisions of credit contracts. In many instances, these amendments must be formalized in a new contract or a rider to the original contract. Except where a specific exception applies, any amendment that results in an increase in the credit rate or credit charges may only be made at the express request of the consumer.

Open credit and credit card application forms must now include a field for the consumer to specify their desired credit limit. Applications that omit this information must be rejected, and financial institutions are prohibited from approving a limit that exceeds the limit requested by the consumer.

A new rule governing payment allocation for open credit and credit card contracts has also come into effect. Under this rule, payments must be applied first to debts bearing the highest credit rate, followed by those with lower rates in descending order.

These changes build on earlier reforms introduced by Bill 29 (2023) and Bill 134 (2017) and reflect a broader trend of provincial governments asserting their regulatory authority in consumer protection matters. Following the Supreme Court’s Marcotte trilogy, which confirmed provincial jurisdiction over credit card regulation, Québec continues to lead the way in reshaping the legal landscape for consumer credit.

Federal initiatives

The previous federal government instigated several financial consumer protection initiatives aimed at alleviating economic stress following the pandemic. The most recent of these initiatives are described below.

• On January 1, 2025, amendments to the Criminal Code to limit the costs of consumer loans came into effect. The criminal interest rate was reduced to 35% APR and dishonoured payment fees charged by payday lenders were capped at $20.
• Amendments to the Financial Consumer Protection Framework Regulations (FCPFR), which take effect on March 12, 2026, will cap NSF fees on personal (but not corporate or business) deposit accounts at $10 per account and restrict the circumstances in which an NSF fee may be charged (for more about these amendments, consult our bulletin). The amendments will also prohibit the imposition of (i) more than one NSF fee in a period of two business days per account; and (ii) an NSF fee on an account that is in unauthorized overdraft by less than $10.
• Following consultations with the federal government, thirteen federally regulated institutions have agreed to modernize their low-cost and no-cost bank accounts. As of December 1, 2025, Canadians will benefit from a low-cost bank account and Canadians that meet certain criteria will also benefit from a no-cost account.

As our current government’s focus has been on building a strong Canadian economy through a panoply of various measures, little has been said or announced with respect to financial consumer protection. However, Prime Minister Mark Carney proposed in his election campaign that, if elected, his government would make mortgages more available to Canadians, providing more options and considering barriers to longer interest rate terms on mortgages. No public announcement with respect to this initiative has yet been made.

This past summer, the Financial Consumer Agency of Canada (FCAC) released their thematic review report on complaint handling, which focused on the small and medium-sized banks’ compliance with the Financial Consumer Protection Framework (FCPF)’s complaint handling requirements. The report identified several areas of improvements for the banks and clarified FCAC’s high expectations with respect to adherence to FCPF’s requirements. The report noted that FCAC will be actively monitoring the banks’ progress with improving their policies and procedures to ensure compliance.

Consumer-driven banking (open banking)

Open banking is a practice that allows consumers to provide third party financial service providers with open access to their banking, transaction and other financial data from banks and non-bank financial institutions. In June 2024, the federal government passed the Consumer-Driven Banking Act, which addresses the elements of governance, scope and process. The more substantive aspects of this framework, such as liability and privacy, are expected to be introduced this fall. However, the Budget Implementation Bill passed last June also amended the Financial Consumer Agency of Canada Act and established an independent “parallel” consumer-driven banking regulator within the FCAC structure, while still incorporating many of the elements of FCAC’s administration within this new regulator.

We expect the federal government to advance its open banking agenda this year. Consumer protection will be a core component, with the goal of “[ensuring] that consumers benefit from consistent protection and market conduct standards which would, in turn, help build confidence and trust for consumers”¹. In a June 2025 speech, FCAC Commissioner Shereen announced that FCAC is working closely with the Department of Finance on the development of common rules that would ensure a consistent application of safeguards and uniformity of practice by financial service providers.

Artificial intelligence

AI is transforming the financial services sector, as businesses leverage technology to enhance the consumer experience. However, its adoption can also introduce new challenges and risks.

As we outlined in a previous bulletin, in the right hands, AI tools can offer financial institutions a host of benefits for them and their consumers. For example, AI chatbots are revolutionizing interactions between businesses and consumers, while repetitive internal tasks such as data entry are efficiently automated. AI is also assisting businesses in meeting their compliance obligations, detecting and preventing fraud and automating credit decision-making processes.

At the same time, bad actors are increasingly using AI to create “deepfakes”: falsified clips and documents that target vulnerable people. Data protection is also implicated, as businesses leverage troves of data to train their AI tools. 

We expect that regulators and policy makers will continue to focus in the coming year on the impact of AI on consumer protection. In June 2025, the federal government published a guide on the use of generative artificial intelligence (the Guide) which provides guidance to financial institutions, including banks, on their use of generative AI tools. The Guide includes an overview of generative AI, identifies challenges relating to its use, puts forward principles for using it responsibly and offers policy considerations and best practices. 

More specific to financial institutions, the Quebec Autorité des marchés financiers (AMF) also published in June 2025 draft guidelines on the use of AI systems in financial institutions. As we outlined in a previous bulletin, the draft guidelines, which apply to insurers, financial services cooperatives, trust companies and deposit-taking institutions, establish the AMF’s expectations in relation to the measures financial institutions should take to mitigate risks associated with the use of AI systems.

The draft guidelines largely align with international standards, including those related to risk assessment, testing and monitoring, governance, transparency, and the ethical treatment of customers. The AMF is accepting comments from the public on the draft guidelines until November 7, 2025.

We expect a greater focus in the coming year on agentic AI, which refers to the use of AI systems designed for autonomous decision making. The use of agentic AI in the financial services sector will transform customer engagement and continue to revamp the customer experience. As technology and AI capabilities continue to rapidly change and evolve, we anticipate that regulators will continue to evaluate its impact on consumers.

Conclusion

As we look ahead to new reforms and technologies, financial institutions must adapt to the changing regulatory environment, with new challenges and opportunities alike.