Budget 2026 targets the Big Six with new ownership thresholds and $250,000 deposit insurance
The Carney government’s Budget 2026 has placed Canada’s concentrated banking sector under direct pressure, proposing Bank Act amendments that would give mid-sized lenders and credit unions a credible path to growth in a market long dominated by the Big Six.
Finance Minister François-Philippe Champagne’s budget documents propose lifting the equity threshold at which banks must adopt widely held ownership structures from $12 billion to $25 billion, giving challenger institutions considerably more room to scale before any obligation to open their shareholder base applies.
Raising the bar for mid-sized lenders
Additional measures include exempting foreign bank subsidiaries with less than $8 billion in equity from the public holding requirement, provided the parent institution is widely held and listed on a recognised foreign stock exchange.
A statutory one-year timeline for new entrants into the federal financial institutions framework would also be introduced, alongside greater ownership flexibility for mid-sized banks.
For mortgage brokers, the competitive stakes are concrete. Brokers command a 33% share of the Canadian mortgage market – up four percentage points since 2022, according to Mortgage Professionals Canada’s 2024 Mid-Year Report – and a wider lender field typically delivers better rates and more product diversity for clients.
Naga Parvatharajan, chief executive of Ratehub.ca in Canada, has described Canada’s current regulatory direction as a genuine opportunity.
Speaking on Office of the Superintendent of Financial Institutions (OSFI)’s streamlined approvals framework for new lenders entering the market, he said the approach was “exactly the kind of structural signal that tells fintech innovators, consumers and incumbents: this market is open for business.”
He added that “when more institutions enter the market, Canadians gain better rates and innovative options,” and stressed the need for follow-through: “This is a meaningful step forward, but now we must ensure the entire ecosystem evolves in tandem.”
The budget further proposes giving the OSFI a new secondary competition objective, requiring the regulator to weigh proportionality and compliance burden in its supervisory decisions.
Proposed amendments would also allow provincial credit unions to acquire federal credit unions directly.
Deposit insurance set to double
Beyond ownership reform, the government is proposing to raise Canada Deposit Insurance Corporation (CDIC) coverage from $100,000 to $250,000 per account.
Temporary protection for high balances linked to specific life events, including home sale proceeds, would also apply, with caps on eligible registered and tax-free account deposits removed entirely.
As CMP’s breakdown of Budget 2026’s biggest housing announcements for brokers detailed, these reforms sit alongside a broader lending and insurance overhaul.
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