CIPF, CDIC, and what each does not cover

Two funds for two failures

A client can lose money in two ways that have nothing to do with markets: the dealer holding their securities can become insolvent, or the bank holding their deposits can fail. Canada has a separate protection fund for each, and the paper's distractor set is always the other fund.

CIPF — the Canadian Investor Protection Fund — protects a client's property (cash, securities, futures, segregated funds) held at a CIRO member dealer — investment dealer or mutual fund dealer — when that member becomes insolvent and the property is missing. At time of writing (2026) the limit is $1,000,000 per client for each of three separate account groups: all general accounts combined (cash, margin, TFSAs and FHSAs); all registered retirement accounts combined (RRSP, RRIF, LIF); and all RESPs combined. A client with a cash account and an RRSP at a failed dealer therefore has two separate $1,000,000 limits.

CDIC — the Canada Deposit Insurance Corporation — insures eligible deposits at member banks, federal trust and loan companies and some credit unions when the member fails. At time of writing (2026) the limit is $100,000 (principal plus interest) per depositor per insured category at each member. The categories: deposits in one name, joint deposits, RRSP, RRIF, TFSA, RDSP, RESP, FHSA, and deposits held in trust. Eligible deposits include chequing and savings accounts, GICs and other term deposits, and deposits in Canadian or foreign currency.

Worked example — two failures, one afternoon

The dealer. Renata holds $1,400,000 of securities in a general (cash) account at Northshore Securities, a CIRO member. Northshore fails; after the trustee's recovery, $1,200,000 of her property is missing. CIPF's general-account limit is $1,000,000, so:

CIPF covered    = MIN(1,200,000, 1,000,000) = 1,000,000
CIPF uncovered  = 1,200,000 − 1,000,000     =   200,000

Had the same $1,200,000shortfallbeensplit$700,000 in her cash account and $500,000 in her RRSP, both would have been inside their own limit and she would have lost nothing.

The bank. Tomas has $150,000 in a savings account and an $80,000 GIC, both in his own name at Maritime Bank, a CDIC member. The bank fails. Both deposits sit in the same category — deposits in one name — so they are added together and one $100,000 limit applies:

CDIC covered    = MIN(230,000, 100,000) = 100,000
CDIC uncovered  = 230,000 − 100,000     = 130,000

Had the GIC been inside his TFSA, it would have been a separate category with its own $100,000. In Excel both cases are =MIN(shortfall, limit) and =shortfall - covered.

What neither fund ever covers

Three things, and the exam asks them as "which of the following is covered":

1. A fall in the price of a security. If Renata's shares are worth half what she paid, that is a market loss. CIPF returns her shares, not their old value.
2. Unsuitable or bad advice. A complaint, not an insolvency. It goes to the dealer, CIRO, or the ombudsman.
3. A mutual fund's NAV drop, a bond default, an ETF's decline. CDIC insures deposits — never mutual funds, stocks, bonds, ETFs or crypto-assets, even if bought through the bank.

CIPF also excludes crypto-assets and securities the client holds directly in their own name (they were never at the dealer). And a life insurer's failure belongs to a third body altogether: Assuris, which guarantees policy benefits — at time of writing (2026), a death benefit up to $1,000,000 and cash and segregated-fund values at the higher of $100,000 or 90 %.

Recompute

Renata's shortfall is $900,000 in one cash account — covered 900,000, uncovered 0. Tomas holds $60,000 in one name and $60,000 jointly with his spouse — two categories, both inside the limit, uncovered 0. The arithmetic is trivial; the marks are in knowing which fund, which limit, and which category.