Delegation of RPAA Powers to Bank Officials

Summary#

The Bank of Canada published a notice saying Governor Tiff Macklem will delegate many of his powers under the Retail Payment Activities Act to two senior Bank officials once section 29 of that Act comes into force. The notice, signed on May 30, 2024, names which powers go to the Executive Director responsible for retail payments supervision and which go to the Managing Director responsible for retail payments supervision.

What it does#

• Gives the Executive Director the authority to handle several decisions that relate to registration, revocation and some enforcement steps, including:

  • Decide that a provision of the Retail Payment Activities Act does not apply to a payment service provider or class of providers (section 11).
  • Review a refusal to register an applicant and either confirm the refusal or order the Bank to complete the registration (section 50).
  • Review a notice of intent to revoke a registration and either order withdrawal of the notice or order revocation (section 53).
  • Order the Bank to revoke a registration when a review is not requested (section 54).
  • After representations, decide whether an alleged violation occurred and impose, reduce, or cancel the administrative monetary penalty in a notice of violation (subsection 78(2)).
  • Review Bank decisions about compliance-agreement defaults and either confirm the Bank’s decision or decide the provider has complied (section 83).
  • If the Executive Director is absent or the post is vacant, the acting Executive Director takes these powers; if neither is available, the power goes to a Deputy Governor.

• Gives the Managing Director the authority to carry out other supervisory and enforcement tasks, including:

  • Designate persons or classes of persons as authorized for certain supervisory powers (section 68).
  • Certify unpaid amounts for recovery of administrative monetary penalties/debts (subsection 89(1)).
  • Make compliance orders (including temporary orders) directing a provider to stop or do specific acts (section 94).
  • Apply to a superior court to enforce compliance orders (section 95).
  • If the Managing Director is absent or the post is vacant, the acting Managing Director takes these powers.

• The delegations take effect on the day section 29 of the Retail Payment Activities Act comes into force.

Who's affected#

• Payment service providers (banks, fintech firms, payments processors, crypto firms that offer payment services) that need to register or could face enforcement under the Retail Payment Activities Act.
• The Bank of Canada staff who will use these delegated authorities in day-to-day supervision and enforcement.
• Applicants and existing providers who are awaiting registration, facing revocation, or responding to notices of violation or compliance orders.
• It is not spelled out in the notice whether any other groups are affected.

Why it matters#

• The notice shifts many practical registration and enforcement decisions from the Governor to senior Bank officials. That means those decisions will be handled by officials closer to the day-to-day supervision work once section 29 is in force.
• For businesses, that matters if you are applying to register, subject to a revocation process, or dealing with compliance or penalty notices. The named officials will be the ones who review and decide those matters.
• The notice is an administrative step to make sure the Bank has clear authorities in place when the new retail payments rules start to operate.