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Examining Crypto Regulation in Canada as OSFI Requests Public Comments on Digital Asset Exposure

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The Canadian government has officially launched a consultation for feedback on public disclosure of crypto exposures by federally regulated financial institutions (FRFIs). In an official press release, the Office of the Superintendent of Financial Institutions (OSFI) announced interest in comments on public disclosure as included in the 2023 federal budget.

The OSFI’s consultation is part of efforts to tighten regulation in Canada’s crypto sector, specifically to manage risks to the financial system and protect users. The regulator notes that digital innovation is vital to transact and manage money, but presents several risks when left unregulated. According to the news release, public disclosures promote market discipline, data comparability, and transparency.

The OSFI’s release also mentions that the Basel Committee on Banking Supervision (BCBS), a committee of banking authorities comprising 45 institutions across 28 jurisdictions, launched a similar consultation for internationally active banks in October. The OSFI says its consultation will run alongside that of the BCBS.

In addition to other comments, the Office hopes that responses will specify whether or not there are any technical aspects of the BCBS’ disclosure tables and templates it should modify and implement for institutions in Canada. The regulator is also asking for key considerations to be factored into disclosures regarding their proportionality, and if there are any other points it should consider. Both consultations are seeking comments until January 31, 2024.

New crypto rules implemented in Canada may be considered tight by observers and enthusiasts who prefer a different approach to the control and regulation of cryptocurrencies in the country. However, even when the laws may be deemed difficult, the goal is customer protection.

Globally, authorities and regulators continuously design laws to guide the crypto industry and significantly reduce risks that come with inadequate or a complete lack of regulation. Clarity in the regulatory landscape could greatly aid crypto-related business in Canada and help with growth and development.

Gambling services, for example, could benefit from increased adoption of crypto, and clarity of legislation on the business side. Although heavily regulated in Canada, gambling is allowed as legalized by respective provincial governments. Along with several other popular sectors, online gambling could expand significantly from supportive crypto laws, especially as global interest in crypto casinos increases. Several of these platforms already allow players to safely wager Bitcoin to play popular casino games while enjoying secure payments without third-party interference. In addition, Bitcoin casinos offer players higher RTP (return-to-player) rates than traditional platforms. (Source: https://www.basketballinsiders.com/canada/online-casinos/bitcoin/)

Canada has a recent history of stringent regulation, similar to the continuous crackdown from regulators in the United States. For instance, the Canadian Securities Administrators (CSA) announced a 30-day deadline in April for unregistered crypto trading platforms to register, along with instructions requiring them to separate customer funds. The regulator also asked crypto service providers to immediately suspend access to margin or leverage trading.

In February, the CSA had announced a restriction on stablecoins. According to the agency, crypto asset trading platforms must not allow clients to deposit or trade stablecoins and other “value-referenced crypto assets” (VRCAs) without written permission. The use of the VRCA term is deliberate, to include stablecoins that may have lost some stability in recent times. Part of the requirements for trading companies to trade stablecoins or VRCAs is ensuring all tokens are liquid enough, with an adequate amount in cash reserves.

While the CSA is adamant about restricting access to options, futures contracts, and other derivatives, there are concerns the rule may stifle the growth and expansion of crypto platforms in Canada. In addition, these limitations could affect the ability of platforms to properly compete with similar firms in other parts of the world. Unfortunately, this could put Canada’s crypto industry behind.

Furthermore, there is the worry that Canadians who cannot trade desired products on regulated platforms may go offshore to access these financial derivatives. If this happens, authorities would have failed in their duty of financial protection, especially if people patronize risky or unregulated platforms.

Already, the CSA’s position has led to the exit of a few major crypto service providers. In April, Paxos announced its departure from the Canadian market, stating that it may return upon later assessment. Other platforms, including Binance, OKX, and decentralized exchange dYdX, also left Canada. While OKX said the problem was “new regulations,” dYdX did not offer any specific reasons. However, Binance was direct, stating that the market in Canada is “no longer tenable” because of “new guidance related to stablecoins and investor limits.”

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Bimbo Canada closing Quebec City bakery, affecting 141 workers

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MONTREAL – Bakery company Bimbo Canada says it’s closing its bakery in Quebec City by the end of the year, affecting about 141 workers.

The company says operations will wind down gradually over the next few months as it moves production to its other bakeries.

Bimbo Canada produces and distributes brands including Dempster’s, Villaggio and Stonemill.

It’s a subsidiary of Mexico-based Grupo Bimbo.

The company says it’s focused on optimizing its manufacturing footprint.

It says it will provide severance, personal counselling and outplacement services to affected employees.

This report by The Canadian Press was first published Sept. 19, 2024.

The Canadian Press. All rights reserved.



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NDP to join Bloc in defeating Conservatives’ non-confidence motion

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OTTAWA – The New Democrats confirmed Thursday they won’t help Pierre Poilievre’s Conservatives topple the government next week, and intend to join the Bloc Québécois in blocking the Tories’ non-confidence motion.

The planned votes from the Bloc and the New Democrats eliminate the possibility of a snap election, buying the Liberals more time to govern after a raucous start to the fall sitting of Parliament.

Poilievre issued a challenge to NDP Leader Jagmeet Singh earlier this week when he announced he will put forward a motion that simply states that the House has no confidence in the government or the prime minister.

If it were to pass, it would likely mean Canadians would be heading to the polls, but Singh said Thursday he’s not going to let Poilievre tell him what to do.

Voting against the Conservative motion doesn’t mean the NDP support the Liberals, said Singh, who pulled out of his political pact with Prime Minister Justin Trudeau a few weeks ago.

“I stand by my words, Trudeau has let you down,” Singh said in the foyer outside of the House of Commons Thursday.

“Trudeau has let you down and does not deserve another chance.”

Canadians will have to make that choice at the ballot box, Singh said, but he will make a decision about whether to help trigger that election on a vote-by-vote basis in the House.

The Conservatives mocked the NDP during Question Period for saying they had “ripped up” the deal to support the Liberals, despite plans to vote to keep them in power.

Poilievre accused Singh of pretending to pull out of the deal to sway voters in a federal byelection in Winnipeg, where the NDP was defending its long-held seat against the Conservatives.

“Once the votes were counted, he betrayed them again. He’s a fake, a phoney and fraud. How can anyone ever believe what the sellout NDP leader says in the future?” Poilievre said during Question Period Thursday afternoon.

At some point after those comments, Singh stepped out from behind his desk in the House and a two-minute shouting match ensued between the two leaders and their MPs before the Speaker intervened.

Outside the House, Poilievre said he plans to put forward another non-confidence motion at the next opportunity.

“We want a carbon-tax election as soon as possible, so that we can axe Trudeau’s tax before he quadruples it to 61 cents a litre,” he said.

Liberal House leader Karina Gould says there is much work the government still needs to do, and that Singh has realized the consequences of potentially bringing down the government. She refused to take questions about whether her government will negotiate with opposition parties to ensure their support in future confidence motions.

Bloc Québécois Leader Yves-François Blanchet hasn’t ruled out voting no-confidence in the government the next time a motion is tabled.

“I never support Liberals. Help me God, I go against the Conservatives on a vote that is only about Pierre Poilievre and his huge ambition for himself,” Blanchet said Thursday.

“I support the interests of Quebecers, if those interests are also good for Canadians.”

A Bloc bill to increase pension cheques for seniors aged 65 to 74 is now at “the very centre of the survival of this government,” he said.

The Bloc needs a recommendation from a government minister to OK the cost and get the bill through the House.

The Bloc also wants to see more protections for supply management in the food sector in Canada and Quebec.

If the Liberals can’t deliver on those two things, they will fall, Blanchet said.

“This is what we call power,” he said.

Treasury Board President Anita Anand wouldn’t say whether the government would be willing to swallow the financial implications of the Bloc’s demands.

“We are focused at Treasury Board on ensuring prudent fiscal management,” she said Thursday.

“And at this time, our immediate focus is implementing the measures in budget 2024 that were announced earlier this year.”

This report by The Canadian Press was first published Sept. 19, 2024.



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Anita Anand sworn in as transport minister after Pablo Rodriguez resigns

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OTTAWA – Treasury Board President Anita Anand has been sworn in as federal transport minister at a ceremony at Rideau Hall, taking over a portfolio left vacant after Pablo Rodriguez resigned from cabinet and the Liberal caucus on Thursday.

Anand thanked Rodriguez for his contributions to the government and the country, saying she’s grateful for his guidance and friendship.

She sidestepped a question about the message it sends to have him leave the federal Liberal fold.

“That is a decision that he made independently, and I wish him well,” she said.

Prime Minister Justin Trudeau was not present for the swearing-in ceremony, nor were any other members of the Liberal government.

The shakeup in cabinet comes just days after the Liberals lost a key seat in a Montreal byelection to the Bloc Québécois and amid renewed calls for Prime Minister Justin Trudeau to step down and make way for a new leader.

Anand said she is not actively seeking leadership of the party, saying she is focused on her roles as minister and as MP.

“My view is that we are a team, and we are a team that has to keep delivering for our country,” she said.

The minority Liberal government is in a more challenging position in the House of Commons after the NDP ended a supply-and-confidence deal that provided parliamentary stability for more than two years.

Non-confidence votes are guaranteed to come from the Opposition Conservatives, who are eager to bring the government down.

On Thursday morning, Rodriguez made a symbolic walk over the Alexandra Bridge from Parliament Hill to Gatineau, Que., where he formally announced his plans to run for the Quebec Liberal party leadership.

He said he will now sit as an Independent member of Parliament, which will allow him to focus on his own priorities.

“I was defending the priorities of the government, and I did it in a very loyal way,” he said.

“It’s normal and it’s what I had to do. But now it’s more about my vision, the vision of the team that I’m building.”

Rodriguez said he will stay on as an MP until the Quebec Liberal leadership campaign officially launches in January.

He said that will “avoid a costly byelection a few weeks, or months, before a general election.”

The next federal election must be held by October 2025.

Conservative Leader Pierre Poilievre said he will try to topple the government sooner than that, beginning with a non-confidence motion that is set to be debated Sept. 24 and voted on Sept. 25.

Poilievre has called on the NDP and the Bloc Québécois to support him, but both Jagmeet Singh and Yves-François Blanchet have said they will not support the Conservatives.

Rodriguez said he doesn’t want a federal election right away and will vote against the non-confidence motion.

As for how he would vote on other matters before the House of Commons, “it would depend on the votes.”

Public Services and Procurement Minister Jean-Yves Duclos will become the government’s new Quebec lieutenant, a non-cabinet role Rodriguez held since 2019.

This report by The Canadian Press was first published Sept. 19, 2024.

— With files from Nojoud Al Mallees and Dylan Robertson

The Canadian Press. All rights reserved.



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