Referral fee rules for Canadian mortgage brokers, explained

Our US RESPA Section 8 explainer covers a flat federal ban on kickbacks for referring settlement-service business. Canada has no direct federal equivalent for mortgage referrals — instead, each province's own mortgage broker legislation draws a line around exactly how much an unlicensed person can do, and be paid for, before what looks like a simple referral actually becomes unlicensed mortgage brokering.

Ontario: a "simple referral" is a defined, narrow exemption

Under the Mortgage Brokerages, Lenders and Administrators Act, 2006 (MBLAA) and Ontario Regulation 407/07, a "simple referral" — passing along a prospective borrower's or lender's name and contact information, nothing more — can be made, and paid for, by someone who isn't a licensed mortgage brokerage. The exemption is narrow and conditional: only limited information (like name and contact details) can be exchanged, and the referrer has to disclose the nature of their relationship to the party they're referring and state plainly that they're receiving compensation for the referral. Anything past that — assessing a borrower's needs, negotiating terms, or otherwise taking part in arranging the mortgage itself — is "dealing in mortgages" under the Act, which requires a license regardless of how the arrangement is labeled.

Alberta: the fee has to run through the brokerage, not around it

The Real Estate Council of Alberta (RECA), which licenses mortgage brokers under the Real Estate Act, allows a brokerage to pay a referral fee to an unlicensed person only where that person's own activity doesn't itself require a license — once what they're doing crosses into an actual "deal in mortgages," a referral fee to them is off the table entirely, not just an increased compliance risk. RECA additionally requires every referral fee to be processed through the brokerage itself: a mortgage licensee can't receive a referral fee directly, and can't pay one directly to someone else, outside the brokerage's own books.

British Columbia: referring has to be incidental to the referrer's real business

BC's framework, administered by BCFSA, permits a referral fee to an unlicensed party under a different, narrower test: the referrer can't be soliciting people specifically to generate the referral, and making referrals has to be incidental to whatever their actual, separate business is — a home inspector or accountant occasionally pointing a client toward a mortgage broker fits; someone whose real activity is finding and steering prospective borrowers for a fee doesn't, regardless of how the arrangement is documented. This test currently sits under BC's Mortgage Brokers Act, which our BC transition explainer covers — that Act is being repealed and replaced by the incoming Mortgage Services Act on October 13, 2026, so this specific framework is worth re-confirming directly with BCFSA once that transition takes effect.

The common thread across all three

None of the three provinces ban a referral fee outright the way RESPA Section 8 bans a settlement-service kickback in the US. Instead, each asks a version of the same question: how much did the unlicensed person actually do to earn that fee? A bare introduction, properly disclosed, is generally fine everywhere; anything resembling actual mortgage brokering — assessing, negotiating, or steering based on loan terms — isn't rescued by calling it a "referral," and paying for it without a license is a real, enforceable violation FSRA, RECA, and BCFSA have each pursued in practice.

What this page is, and isn't: a comparative explainer of how three provinces regulate unlicensed referral compensation, for general understanding — not a claim about any specific Canadian broker's, brokerage's, or referral partner's actual compliance. We do not name, rank, vet, or imply any verdict about a specific Canadian broker, originator, or brokerage on this or any Library page, and our published standard and Register remain United States-only.

What to actually check

If someone other than your licensed mortgage broker is being paid for referring you — a real estate agent, a builder, a financial advisor — ask directly whether they disclosed that compensation to you and, in Ontario specifically, whether they disclosed the nature of their relationship to your broker as the "simple referral" exemption requires. If the referrer did anything beyond handing over your contact information — assessing your situation, comparing lenders, or discussing terms — that's a real reason to confirm they're actually licensed, not just introduced.