As federal budget nears, leaders see an opportunity for Canada to advance long-awaited priorities.
Canada’s FinTech leaders say they are worried the country and its entrepreneurs aren’t taking bigger swings on priorities like open banking, payments modernization, and stablecoins—or implementing the systems to support them.
At the University of Toronto’s Munk School of Global Affairs and Public Policy’s third annual The Future event this week, some of the most influential names in Canadian FinTech gathered to take stock of where FinTech stands. Speakers discussed why action is needed now and expressed optimism that shifting geopolitical conditions have created an opportunity for Canada.
“Somehow and somewhere along the way, we started coasting, we started assuming that what was built would maintain itself.”
Som Seif,
Purpose Investments
Purpose Investments founder and CEO Som Seif kicked off the discussion by arguing that, unlike past generations, Canadians today have “stopped building” and are simply resting on their laurels.
“Somehow and somewhere along the way, we started coasting, we started assuming that what was built would maintain itself,” Seif said. He argued that Canadian graduates and entrepreneurs are in a “confidence crisis” as they increasingly choose to build their businesses elsewhere.
But Seif also asserted that geopolitical uncertainty created by the United States and recent technological advances have created a unique opportunity for Canada to shift its approach. He argued that the country already possesses all of the ingredients necessary to compete on the global stage, from the land to the energy, talent, expertise, and enthusiasm.
“We need to organize ourselves around a single driving belief that Canada wins and Canada can build,” Seif said. “Not Canada studies, not Canada considers, not Canada forms a committee, but Canada builds. The window is open right now.”
Other speakers, including Debbie Gamble, chief officer of innovation labs and new ventures at Interac, echoed this belief. “We like to admire the problem,” Gamble said. But with the global economy currently in “crisis,” she argued that now is the time for Canada to focus on execution.
Seif thinks that Canada would do well to choose bold bets over safety, take advantage of the current window to lure more talent to Canada, launch a sovereign wealth fund, and do a better job of celebrating entrepreneurial success—though whether Canada has the existing infrastructure to attract those skilled workers is another question.
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On the FinTech infrastructure front specifically, Canada has lagged its peers on not just open banking and payments modernization but also, more recently, stablecoins, and this has constrained industry progress.
Julien Brazeau, assistant deputy minister of financial sector policy with Canada’s Department of Finance, said Canada got here because it still likes to pat itself on the back for emerging relatively unscathed from the global financial crisis of 2008. He noted that while Canada’s focus on “resilience and stability” has “paid dividends” since then, it has also been “an obstacle in terms of our ability to move on innovation and competitiveness.”
Brazeau said three consecutive Liberal governments have made it difficult to secure the political willpower to introduce more innovation and potentially greater risk to Canada’s financial services system.
However, as Portage Capital Solutions general partner and fellow panellist Devon Kirk noted, caution can carry danger of its own. “This idea that if you wait to see what the winning model is going to be, you can sidestep some risks is seductive,” Kirk said.
Kirk argued that, in practice, innovation tends to come from iteration and build up over time. She asserted that moving too slowly could create “bigger, longer-term risks” to the global competitiveness of national economies and financial systems. “I think we’re seeing that play out currently in Canada,” she said.
Jaded from years of waiting, Canadian FinTech leaders BetaKit spoke with earlier this year expressed cautious optimism that Prime Minister Mark Carney is the right leader to see through key FinTech priorities like open banking and payments modernization.
Brazeau noted on stage that Carney “knows these issues through and through,” and said there is a strong desire across the board at the moment to ensure Canadian competitiveness.
“I see the next few months … as an exciting time to potentially land a lot of these planes that have been circling now for a while, whether it be open banking, payments modernization, or accelerate our work on stablecoins as well, so that we can ensure that we are competitive going forward … [We’re] cognizant that it’s been a slow ride, but we’re committed to action.”
Tanya Woods, head of government and regulatory affairs and policy counsel at Questrade, argued that, in the meantime, Canada’s FinTech industry ought to focus on organizing and providing the Government of Canada with a consensus, rather than separate, competing asks. “If we bring [the feds] consensus, it’s a much easier sell because our customers are voters,” she said.
But Woods also quipped to Brazeau that if the feds fail to deliver on key industry priorities once again in their upcoming budget, the pressure will be on from Canadian FinTech.
“November 4 is a big day,” Woods said. “If you don’t do what you said you’re going to do, we’re going to complain.”
Feature image courtesy Munk School of Global Affairs and Public Policy