News releases

CDIC | Bail-in will help strengthen deposit protection for Canadians

June 24, 2016

OTTAWA, June 24, 2016 – With Bill C-15 recently being passed by Parliament, the Canada Deposit Insurance Corporation (CDIC) has greater powers to provide deposit protection for Canadians.

Bill C-15, the Budget Implementation Act 2016, introduces a bail-in regime to help recapitalize a large Canadian bank by converting some of its debts to common shares while the institution remains open and operating. In the unlikely event of a failure, this would ensure losses are covered by the bank’s shareholders and certain investors, not taxpayers or depositors.

“Bank failures are rare, and the failure of a large bank is very unlikely, but our role is to be prepared for such an event,” said Michèle Bourque, President and CEO of CDIC.

“Bail-in is an important tool that can help keep a large bank open for Canadians while it is being resolved from within, which helps protect our economy and minimizes the risk that tax dollars would be used to bail it out.”

Bail-in would not change the insurance protection that CDIC offers to depositors – their deposits would remain protected.

Ms. Bourque noted that the adoption of bail-in is consistent with global standards set out by the Financial Stability Board, which include ensuring the continuity of essential financial services in failure.

Since it was created in 1967, CDIC has dealt with 43 member failures affecting some 2 million Canadians. No one has lost a dollar of deposits under CDIC protection.

Canada Deposit Insurance Corporation (CDIC) is a federal Crown corporation that contributes to the stability of the Canadian financial system by providing deposit insurance against the loss of eligible deposits at member institutions in the event of failure. Eligible deposits are automatically covered to a limit of $100,000 per insured category at each member institution. CDIC members can include banks, trust and loan companies, federally regulated credit unions, and associations governed by the Cooperative Credit Associations Act that take deposits. CDIC is funded by premiums paid by member institutions and does not receive public funds to operate.

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For further information:

Brad Evenson
Director, Communications and Public Affairs
Tel: 613.943.4395

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