Payments Canada independent director changes

Summary#

These are proposed changes to the Canadian Payments Association Election of Directors Regulations that would make it easier for Payments Canada to pick independent board members. The proposal would let some people who work for entities now eligible to join Payments Canada (but who are not members) serve as independent directors, and would shorten the cooling‑off period from three years to one year. Public comments are open for 30 days from October 11, 2025.

What it does#

• Allows a director, senior officer or employee of an entity that is eligible to be a Payments Canada member — but is not actually a member — to serve as an independent director, as long as that entity is not majority‑owned or controlled by one or more existing members.
• Reduces the cooling‑off period to qualify as an independent director from three years to one year after certain roles or relationships end.
• Updates the independence test so that certain contractual, advisory or compensation relationships within the last year can disqualify someone if those ties “could reasonably be expected to interfere” with independent judgment. It includes a compensation threshold of $75,000 in a calendar year.
• Keeps other independence safeguards in place, and requires the board to confirm annually that the nominating committee has verified directors’ independence.
• These are proposals; they would come into force on the latest of when related provisions of the Fall Economic Statement Implementation Act, 2023 or the Retail Payment Activities Act come into force, or when the Regulations are registered.

Who's affected#

• Payments Canada and its Board recruitment process.
• Individuals who are directors, senior officers or employees of newly eligible entities — for example payment service providers (PSPs), certain credit union locals and operators of designated clearing and settlement systems — who were previously automatically excluded from being independent directors.
• Current and prospective members of Payments Canada, because board composition rules affect governance.
• The Department of Finance is the sponsoring department for the proposal. The proposal says it does not create new costs for businesses and does not affect Indigenous communities.

Why it matters#

• It widens the pool of candidates for independent board seats, letting Payments Canada tap people with more recent, practical payments experience. That can help the board keep up with fast changes in payments technology and services.
• Shortening the cooling‑off period can bring current industry knowledge onto the board sooner, but may raise questions about perceived neutrality. The proposal keeps limits on close ties (for example, majority control by members or recent large payments from a member) and relies on an independent nominating committee and annual checks to manage that risk.
• If adopted, the change could affect which experts are available to govern Canada’s national payments systems — a practical issue for banks, PSPs, and businesses that rely on those systems.