By-law Amending Canadian Payments Association By-law No. 1 — General: SOR/2021-37
Canada Gazette, Part II, Volume 155, Number 7
SOR/2021-37 March 15, 2021
CANADIAN PAYMENTS ACT
The Board of Directors of the Canadian Payments Association, pursuant to subsection 18(1) footnote a of the Canadian Payments Act footnote b, makes the annexed By-law Amending Canadian Payments Association By-law No. 1 — General.
Ottawa, August 11, 2020
Chairperson of the Board of Directors of the Canadian Payments Association
The Minister of Finance, pursuant to subsection 18(2)footnote a of the Canadian Payments Act footnote b, approves the annexed By-law Amending Canadian Payments Association By-law No. 1 — General, made by the Board of Directors of the Canadian Payments Association.
Ottawa, March 8, 2021
Minister of Finance
By-law Amending Canadian Payments Association By-law No. 1 — General
1 Section 10 of the Canadian Payments Association By-law No. 1 — General footnote 1 is replaced by the following:
Maximum number of members
10 (1) The Stakeholder Advisory Council is to consist of no more than 20 persons, of which at least one but no more than two must be elected directors of the Association.
Composition — criteria
(2) The Council must include
- (a) at least 12 persons who are representative of users, of which at least two must be representative of consumers, at least one must be representative of the retail sector, at least two must be representative of the federal and provincial governments and at least one must be representative of the treasury and cash management services sector; and
- (b) at least one person who is representative of payment service providers.
2 The portion of section 11 of the By-law before paragraph (a) is replaced by the following:
Eligibility — criteria
11 Every person appointed to the Stakeholder Advisory Council, other than an elected director of the Association, must
3 Subsection 13(1) of the By-law is replaced by the following:
Term and reappointment
13 (1) Members of the Stakeholder Advisory Council, other than elected directors of the Association, are to be appointed for a term of no more than three years and may be reappointed for any number of additional terms.
4 The By-law is amended by adding the following after section 17:
17.1 Members of the Stakeholder Advisory Council who represent consumers are prescribed as a class for the purposes of subsection 21.2(7) of the Act.
Coming into Force
5 This By-law comes into force on the day on which Subdivision B of Division 1 of Part 4 of the Budget Implementation Act, 2019, No. 1, chapter 29 of the Statutes of Canada, 2019, comes into force, but if it is registered after that day, it comes into force on the day on which it is registered.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the By-law.)
Amendments to the Canadian Payments Association By-law No. 1 — General (the By-law) are required to implement the legislative amendments made to the Canadian Payments Act in the Budget Implementation Act, 2019, No. 1 (BIA1 2019) regarding the Stakeholder Advisory Council (SAC).
The Canadian Payments Act establishes the Canadian Payments Association (operating as Payments Canada) and sets out the governance and membership requirements of the organization. The Act also mandates Payments Canada to establish and operate national systems for the exchange, clearing, and settlement of payments between banks, credit unions, and other Payments Canada members.
The amendments are consequential to technical amendments to the Canadian Payments Act that were introduced in BIA1 2019. The legislative amendments in BIA1 2019 make changes to the operation of the Board of Directors and move a number of prescriptive details relating to the SAC from the Act to the By-law. These amendments enable Payments Canada to more rapidly change the composition of the SAC in order to keep pace with the rapidly changing payments ecosystem. The SAC is composed of members representing the views of consumers, businesses, retailers, and governments, as well as related service providers. The role of the SAC is to advise the Board of Directors on payment, clearing, and settlement matters; to provide input on proposed initiatives, including by-laws, policy statements, and rules that affect third parties; and to identify issues that might concern payment system users and service providers.
In addition, BIA1 2019 gave Payments Canada the authority to make by-laws that prescribe classes of members of the SAC that are eligible for remuneration. The by-laws currently require two members of the SAC to represent the interests of consumers, but the organization has struggled to fill these seats, given financial constraints facing some consumer groups. Consequently, the by-laws prescribe those representing the interests of consumers as eligible for remuneration. This ensures that the Payments Canada Board will continue to receive high-quality counsel on consumer interests.
The amendments to the By-law add necessary provisions for the operation of the SAC and prescribe which of its members are eligible for remuneration (consumer groups).
The amendments to the By-law prescribe details of the SAC, including the number of members, composition, criteria, eligibility for remuneration, and term limits.
In developing the amendments, the Department of Finance received feedback as part of its 2018 consultation on the review of the Canadian Payments Act suggesting the need for flexibility and for remuneration of consumer groups. Payments Canada has also consulted with its members and the SAC on the proposed changes and received their support before seeking approval from the Board of Directors.
Modern treaty obligations and Indigenous engagement and consultation
This By-law has no impact on modern treaty obligations, and the launch of the Indigenous engagement and consultation process is not required.
The initiative discussed in this Regulatory Impact Analysis Statement will be implemented by amending the Canadian Payments Association by-laws.
Benefits and costs
The amendments to the By-law do not impose any costs on Government or taxpayers. Payments Canada is a statutory corporation (non-share capital) created by an Act of Parliament. It operates on a not-for-profit basis and recovers its costs through transaction fees and common service dues levied on members.
The expected annual cost shared among all members to remunerate consumer representatives on the SAC is $60,000. Final cost figures will be determined by Payments Canada.
Small business lens
The small business lens does not apply to the amendments, as they do not impose any costs on small businesses. All members of Payments Canada are financial institutions.
The one-for-one rule does not apply to the amendments, as they do not impose any new administrative burden costs on businesses.
Regulatory cooperation and alignment
This By-law is not related to any commitments with regard to regulatory cooperation or alignment.
Strategic environmental assessment
In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that a strategic environmental assessment is not required for the amendments.
Gender-based analysis plus
No gender-based analysis plus (GBA+) issues have been identified in relation to the amendments.
Implementation, compliance and enforcement, and service standards
In accordance with subsection 18(2) of the Canadian Payments Act, by-law changes require approval by the Minister of Finance to come into force. Following ministerial approval, the by-law must be sent to all Payments Canada members by the President. Payments Canada is responsible for ensuring that its members comply with the by-laws, as applicable. These amendments do not require any new mechanisms to ensure compliance and enforcement.
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