Payments Canada director independence rules

Summary#

This is a proposed change, published on October 11, 2025, to the Regulations Amending the Canadian Payments Association Election of Directors Regulations. It would loosen some rules about who counts as an “independent” director of Payments Canada and shorten the waiting time before a former affiliate can qualify as independent from three years to one year. The proposal is open for comment for 30 days.

What it does#

• Allows directors, senior officers and employees of entities that are eligible for Payments Canada membership but are not members to serve as independent directors, as long as those eligible entities are not majority-owned or controlled by one or more members.
• Reduces the cooling-off period used to judge independence from three years to one year (the draft text replaces “within the last three years” with “within the last year” in several places).
• Updates other independence tests to use the one-year window for:
  • recent contractual or business relationships,
  • recent advisory or consulting roles,
  • and the question of recent compensation above $75,000 in a calendar year.
• Requires the Board to say in its annual report that the nominating committee has confirmed directors’ independence.
• Sets the coming-into-force timing to the latest of several events, including parts of the Fall Economic Statement Implementation Act, 2023, the Retail Payment Activities Act, and registration of the new regulations.

Who's affected#

• Payments Canada’s Board and nominating committee (more people could be eligible as “independent” directors).
• Potential director candidates who are current or former directors, senior officers or employees of newly eligible groups, including:
  • payment service providers (PSPs) under the Retail Payment Activities Act,
  • credit union locals that are part of a credit union central,
  • operators of clearing and settlement systems designated under the Payment Clearing and Settlement Act (entities overseen by the Bank of Canada).
• Current Payments Canada members and entitled members (because the rule still bars people from entities that are majority-owned or controlled by members).
• Department of Finance, which led the proposal and the public consultation.

If it is unclear whether a specific person or organization is covered by the new wording, the proposal text and the listed membership categories should be consulted.

Why it matters#

• It broadens the pool of people who can serve as independent directors for Payments Canada, which could bring more recent payments-sector expertise onto the board.
• A shorter cooling-off period (from three years to one year) makes it easier to recruit people with up-to-date industry knowledge.
• There is a trade-off: some may see a higher risk to perceived independence. The proposal relies on safeguards such as the nomination process, a majority-independent nominating committee and annual reporting of director independence to reduce that risk.
• Because this is a proposed regulation (not final), interested people and organizations have 30 days from publication to comment.