Government of Canada
Symbol of the Government of Canada


Staff image Jeremy Rudin
Superintendent of Financial Institutions

The year under review was notable for the continuing low interest rate environment globally, growing levels of household debt in Canada, and unsettled commodity markets. In 2015-2016, the Office of the Superintendent of Financial Institutions (OSFI) undertook a number of initiatives to address developing risks in these areas, and others, in order to further strengthen Canada’s system of prudential regulation and supervision.

In December 2015, to address growing risks in the residential housing market, OSFI announced planned changes to capital requirements for residential mortgages. The changes will impact the regulatory capital requirements for Canadian deposit-taking institutions engaged in mortgage lending, and the standardized capital requirements for Canada’s private mortgage insurers. These steps will ensure that capital requirements continue to keep pace with housing market developments, and more accurately reflect the underlying risks.

In August 2015, OSFI issued a draft Operational Risk Management guideline for public consultation. The guideline recognizes that regulated entities will have different operational risk management practices depending on such factors as their size, ownership structure, complexity of operations and risk profile. This principles-based approach to regulation gives Canadian financial institutions some flexibility in how they manage their risks, supporting effective competition while reducing compliance costs.

In March 2016, OSFI issued the draft Life Insurance Capital Adequacy Test (LICAT). The LICAT is the culmination of over a decade of work undertaken to replace the current Minimum Continuing Capital and Surplus Requirements (MCCSR) guideline, which has been in place since 1992. The draft guideline takes into account the current economic realities of the life insurance business, recent developments in actuarial and financial reporting standards as well as economic and financial practices, and international trends in solvency frameworks. OSFI will be receiving input from the industry over the summer months and expects to be able to release the guideline in final form in the fall of 2016.

The year under review saw OSFI’s continuing collaboration with our federal financial regulatory partners. During the year, I chaired four meetings of the Financial Institutions Supervisory Committee (FISC) composed of the Governor of the Bank of Canada, the Deputy Minister of Finance, the Chief Executive Officer of Canada Deposit Insurance Corporation and the Commissioner of the Financial Consumer Agency of Canada. Bi-laterally, we worked with the Bank of Canada to conduct macro stress-tests of Canadian Domestic Systemically Important Banks (D-SIBs) and prepared for the implementation of a bail-in regime in collaboration with the Department of Finance and Canada Deposit Insurance Corporation. Our strong relationships with our FISC partners continued to support Canada’s robust financial system.

Internally, our focus continued to be on supporting a high-performing workforce. This year saw the kick-off of our Supervision Training Initiative, a multi-year plan to ensure OSFI supervisors continue to have access to the skills and knowledge necessary to perform their robust oversight of Canada’s federally regulated financial sector. We also began migrating content into a new documents and record management system, which will ensure employees have access to the information they need, when they need it. We also finished development, and started the implementation, of a cyber-security strategy and action plan.

The past year saw OSFI continue to work proactively to protect the interests of Canadian depositors, policyholders and pension plan members, but none of this would be possible without the sustained dedication of my OSFI colleagues. Their professionalism, knowledge and integrity are the foundation of our success as Canada’s world class prudential regulator and supervisor.

Jeremy Rudin