Canada moves to lower banking costs, caps NSF fees at $10

Finance Minister François-Philippe Champagne announced the measure on March 11, saying the cap will come into force on March 12, 2026, as part of broader efforts to make everyday banking more affordable for Canadians.

Officials said more than one in three Canadians incur an NSF fee each year, making the charges a major financial burden, particularly for households living paycheque to paycheque.

"Even if someone is just $5 short when paying a bill or covering a cheque, they can be hit with a non-sufficient funds fee as high as $50," Champagne said in a statement. 

"By capping NSF fees at $10 and strengthening consumer protections, we’re helping Canadians keep more of their hard-earned money while making everyday banking fairer and more affordable, he added.

Under the new rules, banks will also be prohibited from charging an NSF fee more than once within two business days for the same account. Financial institutions will also be barred from charging the fee when the overdraft amount is less than $10.

The government estimates the changes will save Canadians more than $600 million annually.

The announcement is part of a broader package of banking reforms introduced by the federal government to reduce costs and improve financial access.

Through a modernised agreement with 14 federally regulated financial institutions, Canadians now have access to low-cost bank accounts costing no more than $4 per month, with increased transaction limits. 

No-fee accounts are also available for certain groups, including youth, students, seniors receiving the Guaranteed Income Supplement, and beneficiaries of the Registered Disability Savings Plan.

Canada is also proposing changes to cheque hold rules through Bill C-15, which would increase the amount of deposited funds immediately available to consumers from $100 to $250 and remove timing differences between deposit methods.

Secretary of State Wayne Long said high NSF charges often worsen financial difficulties for struggling households.

"Limiting these fees to just $10 per occurrence ensures fairer treatment for consumers," Long said, adding that the reforms are part of a broader effort to make banking more accessible and affordable.

The federal government said it will continue working with financial institutions, consumer advocates and other stakeholders in the coming months to explore additional measures aimed at improving affordability and strengthening protections for Canadian banking customers.