The Ombudsman for Banking Services and Investments turns thirty this year. It has built a credible reputation as an independent, professionally run dispute resolution service. It has also spent all those thirty years without the power to make binding decisions.
An investor who prevails at OBSI can still walk away with less than OBSI recommended — sometimes substantially less — because the firm can simply decline to follow the outcome. Between 2019 and 2023, 33 cases resulted in investors receiving $1.1 million less than OBSI recommended. In 2024 alone, two cases left investors nearly $300,000 short of what the ombudservice said they were owed. Each of those gaps exists for one reason: the absence of binding authority.
OBSI is currently undergoing an independent external review. FAIR Canada submitted formal input in April, arguing that binding authority is not a refinement to an otherwise adequate system — it is the precondition for the system working as it is supposed to. An ombudservice whose recommendations a firm can set aside offers investors a process, not a remedy.
This issue connects directly to the complaint-handling reforms FAIR Canada has been pressing more broadly, including our call for a national 60-day standard for dealer responses to investor complaints. Timely resolution and binding decisions are essential features of an effective dispute-resolution system. A process that takes too long can cause undue stress and financial hardship and may lead investors to abandon their claims. Likewise, a process that produces non-binding outcomes may fail to deliver meaningful redress.
Saskatchewan, New Brunswick and Manitoba have enacted legislation that would make OBSI decisions binding and enforceable as court orders. These governments deserve credit for moving forward with a crucial investor protection measure. The harder truth is that most provincial governments, notably the larger ones, have not acted, leaving the framework fragmented in ways that harm investors in those provinces. The external review is an opportunity to say plainly what the evidence shows — and to put that evidence in front of the provinces that have so far declined to act.
Read our April 24 submission to the OBSI external review here.