Canada Gazette, Part I, Volume 159, Number 41: By-law Amending the Canadian Payments Association By-law No. 6 — Compliance

October 11, 2025

Statutory authority
Canadian Payments Act

Sponsoring department
Department of Finance

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the By-law.)

Issues

The current processes set out in the Canadian Payments Association By-law No. 6 — Compliance (the By-law) for investigating and addressing alleged contraventions can be onerous and time-consuming and are not purpose-built for simple or uncontested contraventions. The proposed amendments to the By-law would introduce an expedited process for the investigation of such contraventions. The proposed amendments would also increase the maximum penalty amount to ensure that penalties continue to serve as an effective compliance tool.

Background

The Canadian Payments Association (doing business as Payments Canada) is a statutory corporation under the Canadian Payments Act (the Act) with a mandate to establish and operate national systems for the exchange, clearing and settlement of payments. The Act established Payments Canada and it establishes its mandate and duty, its governance structure, and eligibility for membership. Only members of Payments Canada are eligible to participate in its systems.

Payments Canada members and system participants must comply with the requirements set out in Payments Canada’s by-laws and rules, such as participation requirements and time frames for settlement and clearing of payment items. A contravention occurs when a member fails to comply with applicable requirements, such as failure to follow security requirements for a payments system. The By-law sets out the processes for investigating and addressing alleged contraventions, including any sanctions that may be imposed if a contravention has occurred. If the President reasonably believes that a contravention has been committed, or if a member has filed a complaint to the President alleging that a contravention has occurred, investigations will follow the processes currently set out in the By-law, as described below.

When a matter or complaint is referred to a committee, the committee establishes a compliance panel to investigate. The President or compliance panel must hold a hearing unless those involved agree it is not necessary. Following an investigation by the President or a compliance panel, if it is determined there has been a contravention, sanctions may be imposed. Examples of sanctions include reprimanding the member and ordering the payment of a monetary penalty, as set out in the By-law. The President or the compliance panel may also require the payment of expenses of the investigation. As the current process can be time-consuming, it is not appropriate for simple or uncontested contraventions.

The proposed amendments to the By-law would

Objective

The proposed amendments would (1) introduce an expedited process for investigations where the alleged contravention is simple or uncontested, and (2) ensure the continued effectiveness of the penalty amount as an appropriate enforcement tool to promote compliance.

Description

Investigation by the President

The proposed amendments would introduce a more efficient process, similar to the existing process for investigating member complaints, that would allow the President, when they reasonably believe that a member has not complied with a requirement of the by-laws and rules, and the matter is simple or uncontested, to investigate without referral to a committee. This decision would take into account, among other things, the complexity of the matter, the potential or real impact of the alleged contravention, and the relevant compliance history. The criteria to be considered in making this decision would be set out in procedures established by Payments Canada, consistent with the current processes for the President to investigate member complaints.

Under the proposed process, shorter time frames would apply to enable faster investigation and resolution without the need for a hearing, thereby decreasing the burden on Payments Canada and compliance panel members.

For both investigations conducted by the President and complaints initiated by members, the proposed amendments would allow the President to, at any point during the investigation, refer the issues to a committee for investigation, for example if it is more complex than initially anticipated. Matters and complaints referred to a committee would use the existing investigation process set out in the By-law, including procedures for a hearing.

When the President initiates and conducts an investigation, a hearing would not take place. Other procedural rights set out in the By-law would remain, including the right to a fair and impartial investigation. If a member disputes the decision, the proposed amendments would introduce the right for a member to have an independent review of the President’s decision by a compliance panel. A compliance panel would independently review the facts and evidence and either agree with the President’s decision or render its own decision.

Maximum penalty amount

Amendments to the By-law are also proposed to increase the maximum penalty amount for each contravention from $250,000 to $1,000,000, which has remained unchanged since 1998. The proposed increase in the penalty amount is reflective of inflation over time and of an amount to encourage compliance. Other existing sanctions, including reprimanding or suspending one or more rights of a member, would remain the same. Penalty amounts would be determined in accordance with criteria established by Payments Canada, consistent with its current risk-based compliance approach.

Technical amendments

Technical changes are proposed to update certain definitions in the By-law to align with recent amendments to the governing legislation and to reflect current practices.

Regulatory development

Consultation

In developing the proposed amendments, Payments Canada consulted its regulators, members and stakeholders, including targeted consultation with credit union locals, payment service providers, and clearing houses as well as the Member Advisory Council, Stakeholder Advisory Council, Legal and Policy Group, and Senior Operational Committee. Entities engaged showed support for the policy proposals and amendments to the By-law.

A 30-day public consultation was held between February 4 and March 6, 2025, seeking views on the policy proposals to introduce a simplified process for addressing alleged contraventions that are straightforward or uncontested and to increase the maximum penalty amount to $1,000,000.

The consultation revealed support for an expedited process to investigate simple or uncontested contraventions as well as an increase to the maximum penalty amount from members, credit union locals, payment service providers, clearing houses, and consumer groups.

Indigenous engagement, consultation and modern treaty obligations

The amendments have no impact on modern treaty obligations, and the launch of the Indigenous engagement and consultation process is not required.

Instrument choice

There are no instrument alternatives available for Payments Canada. The amendments must be made by way of a by-law amendment.

Regulatory analysis

Benefits and costs

The proposed amendments to introduce a new process for investigating alleged contraventions will decrease the administrative burden on Payments Canada and on the members that otherwise would be required to participate in an investigation process involving a hearing. The new process will enable Payments Canada to expedite the investigation process, where applicable. The benefit cannot be monetized, as it is administrative in nature.

The proposal to increase the maximum penalty amount is intended to promote compliance. An increased maximum penalty amount would result in additional costs to members in the event of a contravention resulting in a penalty being imposed at a higher level than allowed today following an investigation. However, the costs and benefits related to the increase in the maximum penalty amount are not considered costs nor benefits within the scope of the regulatory analysis, since they occur only in instances of non-compliance with requirements set out in the by-laws and rules.

There are no costs to the Government or taxpayers. Payments Canada is a statutory corporation created by an Act of Parliament. It operates on a not-for-profit basis and recovers its costs through transaction fees and common services dues levied on its members.

Small business lens

Analysis under the small business lens determined that the proposed amendments are unlikely to result in costs for small businesses. Small businesses may be eligible for membership and choose to apply to become a member of Payments Canada. For a small business that becomes a member and is alleged to be in contravention, the introduction of a new process would lessen the administrative burden associated with an investigation involving a hearing. Based on current interests and the number of small businesses eligible for membership, the annualized net impact on small businesses is expected to be $0.

The amendments to increase the maximum penalty amount will not impose an administrative or compliance burden on Canadian small businesses. Contraventions are not considered to be an administrative or a compliance burden for the purpose of the small business lens.

One-for-one rule

The one-for-one rule applies, since there is an incremental decrease in the administrative burden on business. The amendments to introduce a new process for investigating alleged contraventions would decrease the administrative burden on members that otherwise would participate in the current investigation process involving a hearing. The proposal is considered a burden OUT under the rule, and no regulatory titles are repealed or introduced. The amendments would result in an annualized administrative total cost savings of $1,388.

As per the Red Tape Reduction Regulations, the assessment of administrative impacts was conducted for a period of 10 years commencing from registration. All values listed in this section are presented in 2012 dollars, discounted to 2012 at a rate of 7%.

The amendments related to the introduction of a new investigation procedure represent an annualized total cost savings of $1,388. Up to 10 businesses would save five hours by not having to participate in a hearing once per year. The average wage (including overhead) of the responsible individual is estimated to be $61.80.

The amendments to increase the maximum penalty amount would have no incremental change in the administrative burden on businesses. Contraventions are not considered to be an administrative burden for the purpose of the one-for-one rule.

Regulatory cooperation and alignment

The amendments are not related to any commitments with regard to regulatory cooperation or alignment.

Effects on the environment

No environmental or economic effects have been identified.

Gender-based analysis plus

No impacts based on gender and other identity factors have been identified.

Rationale

The amendments to the By-law are proposed to ensure that Payments Canada’s compliance framework and tools are effective in promoting compliance. This will achieve the stated objectives.

Implementation, compliance and enforcement, and service standards

The amendments to the By-law come into force on the later of the day that sections 219 to 228 of the Fall Economic Statement Implementation Act, 2023 come into force or on the day it is registered. Payments Canada is responsible for ensuring that its members comply with the by-laws, as applicable. The amendments do not require any new mechanisms to ensure compliance and enforcement.

Contact

Stephanie Mould
Vice President
Compliance, Privacy and Bank of Canada Affairs
Canadian Payments Association
Constitution Square, Tower II
350 Albert Street, Suite 800
Ottawa, Ontario
K1R 1A4
Email: smould@payments.ca

PROPOSED REGULATORY TEXT

Notice is given that the Board of Directors of the Canadian Payments Association proposes to make the annexed By-law Amending the Canadian Payments Association By-law No. 6 — Compliance under subsection 18(1)footnote a of the Canadian Payments Act footnote b.

Interested persons may make representations concerning the proposed By-law within 30 days after the date of publication of this notice. They are strongly encouraged to use the online commenting feature that is available on the Canada Gazette website, but if they use email, mail or any other means, the representations should cite the Canada Gazette, Part I, and the date of publication of this notice, and be sent to Stephanie Mould, Vice President, Compliance, Privacy and Bank of Canada Affairs, Canadian Payments Association, Constitution Square, Tower II, 350 Albert Street, Suite 800, Ottawa, Ontario K1R 1A4 (email: smould@payments.ca).

Ottawa, August 11, 2025

Garry Foster
Chairperson of the Board of Directors of the Canadian Payments Association

By-law Amending the Canadian Payments Association By-law No. 6 — Compliance

Amendments

1 The definitions committee, item in dispute and non-member in subsection 1(1) of the Canadian Payments Association By-law No. 6 — Compliance footnote 1 are replaced by the following:

committee
means a committee established by the Association or a subcommittee of that committee. (comité)
item in dispute
has the meaning assigned by the rules. (effet contesté)
non-member
means a local that is not a member and belongs to a central or cooperative credit association that is a member. (non-membre)

2 The heading before section 2 of the French version of the By-law is replaced by the following:

Enquête à l’initiative du président

3 (1) Subsection 2(1) of the By-law is replaced by the following:

Initiated by President

2 (1) The President may, at any time, if the President reasonably believes that a member or non-member has committed a contravention,

(2) Subsection 2(2) of the By-law is amended by striking out “and” at the end of paragraph (c) and by adding the following after that paragraph:

(3) Subsection 2(3) of the By-law is replaced by the following:

Notice

(3) If the President decides to investigate a matter or refer a matter to a committee, the President must give written notice to the parties of that decision. The notice must contain a description of the alleged contravention.

Referral during investigation

(4) At any time during an investigation under paragraph (1)(a), the President may decide to refer the matter, for the purposes of an investigation, to a committee that has relevant expertise. The President must give written notice to the parties of that decision.

4 (1) Subsection 6(1) of the English version of the By-law is replaced by the following:

Powers of President

6 (1) The President must, if the President believes that the complaint is not frivolous, vexatious or made in bad faith,

(2) Subsection 6(3) of the By-law is replaced by the following:

Referral to committee

(3) The referral of a complaint to a committee under paragraph (1)(b) must be made within 40 days after the day on which the complaint is filed.

Referral during investigation

(4) At any time during an investigation under paragraph (1)(a), the President may decide to refer the complaint, for the purposes of an investigation, to a committee that has relevant expertise. The President must give written notice to the parties of that decision.

5 The portion of subsection 8(1) of the By-law before paragraph (a) is replaced by the following:

Duties

8 (1) If a matter or complaint has been referred to a committee, the committee must, no later than at its next regular meeting,

6 Subsection 9(2) of the By-law is replaced by the following:

Conflict of interest

(2) If the President or a member of a compliance panel has, or appears to have, a conflict of interest, the President or the compliance panel member, as the case may be, must withdraw from the investigation and

7 Subsection 10(2) of the By-law is replaced by the following:

Association

(2) Subject to subsection (3), the Association is a party to every investigation other than one conducted by the President under paragraph 2(1)(a).

8 Section 15 of the By-law is amended by adding the following after subsection (4):

Non-application — investigation by President

(5) This section does not apply to an investigation conducted by the President under paragraph 2(1)(a).

9 The By-law is amended by adding the following after section 15:

Investigation by President — response and evidence

15.1 (1) If the President conducts an investigation under paragraph 2(1)(a), the parties may, within 10 days after the day on which the notice referred to in subsection 2(3) is given to the parties, provide a response in writing and submit evidence.

Acknowledgement of receipt

(2) The President must acknowledge, in writing, receipt of the response and evidence provided by the parties.

Decision

(3) The President must render a decision in writing and provide a copy to the parties within 20 days after the day on which the notice referred to in subsection 2(3) is given to the parties.

Decision — contents

(4) The decision must contain the following information:

Review of President’s decision

15.2 (1) A party may, within 30 days after the day on which a copy of the decision referred to in subsection 15.1(3) is provided to the parties, make a request in writing to the President to have that decision reviewed by a compliance panel.

Payment of penalty — no review

(2) However, if in the decision the President orders a party to pay a penalty and the penalty has been paid in whole or in part, that party is not permitted to request a review.

Request for review — content

(3) The request for review must include the party’s submissions without introducing new evidence.

Acknowledgement of receipt

(4) The President must acknowledge, in writing, receipt of the request for review.

Referral

(5) Within five days after the day on which the request for review is received, the President must refer it, for the purposes of a review, to a committee that has relevant expertise.

Application and non-application of certain provisions

(6) Sections 8 and 9, subsection 10(1) and sections 11, 13, 14, 16 and 17 apply to a review, with any necessary modifications, and sections 12 and 15 do not apply to a review.

Relevant information and documents

(7) The compliance panel may request that any party or the Association provide information or documents that are relevant to the review.

Review

(8) During a review, the compliance panel must review the submissions provided under subsection (3), any information and documents provided under subsection (7) and any evidence provided under subsection 15.1(1).

Powers of review

(9) After the review, the compliance panel

Decision

(10) The compliance panel must render its decision in writing and provide a copy to the parties within 30 days after the day on which the compliance panel is established.

Decision — contents

(11) The compliance panel’s decision must contain the following information:

10 Paragraph 16(1)(f) of the By-law is replaced by the following:

11 (1) Section 18 of the English version of the By-law is replaced by the following:

Compliance

18 Every member who is subject to an order under subsection 16(1) or section 17 must comply with the order.

(2) Section 18 of the By-law is renumbered as subsection 18(1) and is amended by adding the following:

Investigation by President

(2) However, in cases where an order is issued in a decision rendered under subsection 15.1(3), the member is not required to comply with the order until the day after the day on which

12 Subsection 19(1) of the By-law is replaced by the following:

Investigation by President

19 (1) If an investigation is conducted by the President other than under paragraph 2(1)(a), the President must prepare a compliance report.

13 Paragraphs 20(c) and (d) of the By-law are replaced by the following:

14 Section 22 of the By-law is amended by adding the following after subsection (1):

Investigation by President

(1.1) However, in cases where the amount to be paid is set out in a decision rendered under subsection 15.1(3), the amount is due within 30 days after the day on which

15 Subsection 24(1) of the By-law is replaced by the following:

Register

24 (1) Every compliance report prepared under section 19, every decision or order of the Board made under subsection 7(9) and every decision of the President or the compliance panel rendered under subsection 15.1(3) or 15.2(10), as the case may be, must be filed with the Association and recorded in a register maintained by the secretary.

16 Subsection 26(1) of the French version of the By-law is replaced by the following:

Modes de communication

26 (1) Tout avis qui doit être donné conformément au présent règlement administratif est considéré comme donné s’il est remis au membre en main propre, transmis par télécopieur ou courrier électronique ou envoyé par courrier recommandé — sauf lorsque le service postal est interrompu ou risque de l’être à cause d’un conflit de travail — au destinataire et à l’adresse figurant sur la liste des membres ou aux registres de l’Association.

17 The English version of the By-law is amended by replacing “shall” with “must” in the following provisions:

Coming into Force

18 This By-law comes into force on the day on which section 222 of the Fall Economic Statement Implementation Act, 2023, chapter 15 of the Statutes of Canada, 2024, comes into force, but if it is registered after that day, it comes into force on the day on which it is registered.

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