Effective April 30, 2022 the Canada Deposit Insurance Corporation (CDIC) will be changing rules governing deposit insurance protection for deposits held “in trust” at CDIC member institutions for “professional trustees”. The following definitions under the CDIC Act includes as Professional Trustees:

• a lawyer or partnership of lawyers, a law corporation, or a notary or partnership of notaries in the province of Quebec, when they act in that capacity as a trustee of moneys for others;
• a person who is acting as a trustee of moneys for others in the course of business and is required by or under a statute to hold the deposit in trust;
• a person who is acting as a trustee of moneys for others in the course of business and is subject to the rules of a securities commission, stock exchange or other regulatory or self-regulating organization that audits compliance with those rules.

CDIC continues to insure eligible deposits in trust to a maximum of $100,000 per beneficiary under the new rules. If a CDIC member bank becomes insolvent and is unable to return deposits then those with losses can make a claim.  This in fact happened in 1985 when depositors made claims following the collapse of both the Canadian Commercial Bank and Northland Bank.

For more information on the proposed CDIC changes please visit the website for Professional Trustees.

Thanks for Reading!

James Jacuta