Ottawa is taking much longer than anticipated to appoint an organization to set data standards for open banking, as sovereignty concerns turn a niche technical issue into a potential political landmine that threatens to further delay the long-awaited framework.

Jason Chomik, Canadian director of the Financial Data Exchange (FDX), said in an email that the organization’s Canadian members have spent the past year advocating Ottawa to choose it as open banking’s technical standards body. The organization would make the rules that ensure financial institutions share data securely and compatibly, at a customer’s request, to power accounting software, budgeting apps and other tools. FDX, the most widely used technical standard for financial data sharing in North America, launched in the U.S. in 2018 and expanded into Canada in 2020.

Abraham Tachjian, the Canadian government’s former open banking head for the Department of Finance, said in an interview that the Canadian financial services industry considers FDX “the de facto standard.” Records from meetings of the Bank of Canada’s advisory committee on open banking show the Department of Finance has repeatedly delayed formally appointing it, however. A document from a May meeting said a decision “is expected to be made this spring.” An agenda for the committee’s next meeting in July said there might be an update in September. To date, no announcement has been made.

Brian Harris, CEO of B.C.-based Beem Credit Union, said he understands the trade war and geopolitical tensions have added complexity to the decision. Realistically, however, he said whatever data standard Canada chooses will need to be compatible with FDX’s, given its widespread use.

“Call it what you want, but copy and paste what the standard is,” Harris said. “This is where I get frustrated. We make things harder that don’t need to be harder.”

Slight changes to the legislation’s wording year to year offer clues that might explain the holdup, Tachjian said. Legislation introduced following the 2024 federal budget lays out four principles the government must consider when choosing an open banking technical standards body, including safety, security, transparency and good governance.

Shortly after the introduction of the 2025 budget, the federal Liberals added three more principles: whether the organization is Canadian, how independent it is and whether it can comply with Canadian law. “These three new conditions speak to the additional elements that the government is considering as important when it nominates, essentially, the infrastructure that communicates Canadians’ financial data,” Tachjian said.

Over the past year, Canadian policymakers have emphasized the importance of the financial system’s sovereignty amid a trade war and U.S. threats to annex Canada. In August, a U.S. private equity firm’s $2-billion deal to buy Moneris, Canada’s largest merchant payments processor, prompted concerns that the U.S. could shut off access to American-owned financial networks if relations broke down further.

Steve Boms, executive director of the Financial Data and Technology Association of North America, a pro-open banking industry association, said Ottawa wants to ensure that the data standards body has Canadian governance and oversight. “It is a challenge that they’ve been working toward with regard to how to make a made-in-Canada open banking framework when you’re relying on a standard that was started elsewhere,” he said.

Chomik did not address how FDX would manage sovereignty concerns if it became Canada’s technical standards body. The Bank of Canada, which will directly oversee open banking, directed The Logic to the Department of Finance for comment.

Marie-France Faucher, a spokesperson for the Department of Finance, said “the designation is pending,” but declined to comment on the timing or whether sovereignty concerns have contributed to the delay.

The holdup makes it all but certain that open banking will miss its promised launch in 2026. A document from the Bank of Canada’s May advisory committee meeting outlines a long list of things that still need to get done beyond naming a data standard, including appointing an external complaints body, developing regulations and finalizing the list of banks required to participate. It says the Department of Finance plans to publicize final regulations “​​in late 2026 or early 2027.”

Open banking has been repeatedly delayed since Ottawa first announced it would implement it in 2017. Big banks and fintechs have historically clashed because it forces financial institutions to share customer data with potential competitors, making it easier to find better offers and switch providers.

Marcelo Prates, head of government relations for the Americas for U.K. fintech Wise, said he’s concerned the technical standards debate could further delay open banking, especially if the Department of Finance decides Canada needs to build its own from scratch.

“When you start to talk about creating like a whole new entity, that sounds like years,” he said. “It would be, I think, easier or more beneficial to consumers to find a more immediate solution.”