Canada Proposes Ban on Investment Account Transfer Fees
The Canadian federal government has released draft regulations to prohibit banks from charging administrative fees for transferring investment accounts, including RRSPs, TFSAs, and RESPs. A 30-day consultation period is set to begin after Saturday.
The Canadian federal government has released draft regulations aimed at prohibiting banks from charging clients administrative fees when moving investment accounts to different financial institutions. The proposed ban covers registered accounts such as RRSPs, TFSAs, and RESPs, as well as non-registered investment accounts held at Canadian banks.
According to a regulatory impact analysis by the Department of Finance, investment account transfer fees are typically $150 per account. If approved, the regulations would fulfill a promise made in Ottawa's 2025 budget to prohibit these transfer fees. While the ban eliminates flat administrative transfer charges, it does not waive product-level costs such as trading commissions, early-redemption penalties on GICs, or mutual fund sales fees. Fees associated with personal chequing and savings accounts are also not impacted by the proposed regulations.
Li Zhang, director of social impact at Chartered Professional Accountants of Canada, stated that eliminating transfer fees encourages Canadians to shop around for better-matched financial institutions. Zhang argued that the ban benefits lower-income Canadians by removing significant administrative costs and helps smaller upstart financial institutions compete against major banks by lowering client acquisition barriers.
Wealthsimple CEO Michael Katchen praised the move, noting that Canadians were charged $73 million in exit fees to move their savings to Wealthsimple this year alone.
The Canadian Bankers Association (CBA), which represents over 60 domestic and foreign banks, confirmed it is reviewing the draft regulations and plans to work with Ottawa on implementation. A 30-day consultation period on the issue is scheduled to begin after Saturday.