A Canadian Bank Confirmation Letter is a formal document requesting a financial institution to verify and confirm specific details of a banking relationship. Canadian banks are regulated under the Bank Act (S.C. 1991, c. 46), which governs all Schedule I banks (domestically owned banks such as RBC, TD, BMO, Scotiabank, CIBC, and National Bank of Canada) and Schedule II banks (foreign bank subsidiaries authorized to accept deposits in Canada). Credit unions are regulated at the provincial level under legislation such as Ontario’s Credit Unions and Caisses Populaires Act, 2020 (S.O. 2020, c. 36).

In the context of financial auditing, Canadian Auditing Standards (CAS) issued by the Auditing and Assurance Standards Board (AASB) of CPA Canada require auditors to obtain external confirmations of bank balances as part of audit evidence. CAS 505 establishes the standards for external confirmations, which parallel the international standards ISA 505. Auditors use the CPA Canada Standard Confirmation Form to verify a client’s bank balances, outstanding loans, contingent liabilities, and other banking arrangements.

Canadian bank confirmations are subject to strict privacy requirements under the Personal Information Protection and Electronic Documents Act (PIPEDA, S.C. 2000, c. 5) at the federal level. In Alberta, the Personal Information Protection Act (PIPA) applies, and in Quebec, the Act Respecting the Protection of Personal Information in the Private Sector governs personal data disclosure. All require the account holder’s explicit written consent before a bank can disclose any financial information to a third party.

An external auditor conducting a year-end audit of a Canadian company needs independent confirmation of bank account balances, outstanding loans, and contingent liabilities from each financial institution where the company holds accounts. Under Canadian Auditing Standards (CAS 505), auditors must obtain direct confirmation from banks as part of the audit evidence gathering process.

A business applying for a commercial lease in Canada needs a bank confirmation letter to verify the company’s financial capacity. Canadian commercial landlords commonly request bank letters confirming account balances and banking history before approving a lease. Similarly, individuals applying for temporary or permanent residence in Canada may need bank confirmation letters to demonstrate financial resources as part of their Immigration, Refugees and Citizenship Canada (IRCC) application.

A company bidding on a federal or provincial government contract must demonstrate financial capability. The procurement rules under the Government Contracts Regulations (SOR/87-402) may require financial verification, and bank confirmation letters serve as evidence of the bidder’s financial standing.

Business owners seeking financing from a different institution, investors conducting due diligence before making an investment, and parties to legal proceedings who need to verify or prove the existence and balance of bank accounts all require bank confirmation letters. In family law proceedings under provincial family law statutes, bank confirmation letters may be required as part of mandatory financial disclosure.

The letter must identify the financial institution by its full legal name (as registered under the Bank Act or provincial credit union legislation), branch address, and transit number or institution number. The bank officer or authorized signatory who will process the request must be identified by name, title, and contact information.

The account holder’s information must include the full legal name (individual or entity), address, and relationship to the bank. For business accounts, the corporation’s Business Number (BN) issued by the Canada Revenue Agency may be referenced. The letter should specify whether the account holder is a sole owner, joint owner, or authorized signatory.

Account details should include the account number, account type (chequing, savings, GIC, TFSA, RRSP, line of credit), the date the account was opened, and the current balance in Canadian dollars as of a specified date. For audit purposes, the CPA Canada Standard Confirmation Form requests specific balance information as of the audit date.

For loan confirmations, the letter should disclose the loan type, original principal amount, current outstanding balance, interest rate, maturity date, collateral pledged, and whether the account is in good standing. Contingent liabilities such as letters of credit, guarantees, and unused credit lines should also be disclosed.

A PIPEDA authorization clause is essential, confirming that the account holder consents to the disclosure of the specified financial information for the stated purpose. Without this authorization, Canadian financial institutions are prohibited from disclosing account information to third parties. The letter must include the date of issuance and should be on the bank’s official letterhead with an authorized signature.