Ben Gully, Deputy Superintendent – Supervision Sector, delivers opening remarks for OSFI’s Risk Management Webcast

Good afternoon, everyone.

Welcome to our 2025 Risk Management Webcast. It’s great to see so many participants from across Canada’s financial sector joining us today.

Thank you for taking the time to be here. And thanks to our OSFI colleagues who helped bring today’s agenda to life.

This event has become a cornerstone of how we engage with the institutions we supervise. It’s a forum to strengthen dialogue, share our perspective on the current risk landscape, and sharpen our collective focus on the most pressing challenges.

It’s how we stay alert, stay connected, and keep risk management at the centre of decision-making.

Today’s sessions are all about looking forward—how OSFI applies its supervisory framework, how we are carrying out our expanded mandate, and how we expect financial institutions, executives, and boards to keep pace with that change.

Reflections on the current risk environment

Let me begin with a few reflections on the current risk environment.

Financial risks are once again moving to the forefront of our attention. While integrity and security risks continue to demand vigilance, the current risk landscape is increasingly shaped by renewed economic headwinds, heightened uncertainty, and the early emergence of labour market pressures, including signs of rising unemployment

Global trade tensions—and the unpredictability of tariffs—are rippling through supply chains and credit markets. This volatility creates tremendous uncertainty and challenges for institutions.

Tariff-related impacts may also exacerbate existing headwinds in real estate lending and corporate credit—two areas highlighted in OSFI’s Annual Risk Outlook. Although lending portfolios have shown resilience to date, investment uncertainty and second-order impacts linked to tariffs could lead to higher delinquencies and impairment levels in the second half of the year.

Rising costs, reduced consumer demand, and export uncertainty are also increasing stress on businesses, especially in trade-dependent sectors.

Elevated housing prices due to persistent imbalances in the housing market, have led to higher levels of debt for some households and businesses. This has made them more vulnerable to financial shocks.

Funding markets are functioning smoothly for now. However, market volatility—driven by today’s geopolitical environment—can influence both the cost and availability of funding in domestic and foreign currencies.

With this in mind, our supervisors are actively engaging with institutions on downturn preparedness. That includes actions around provisioning, contingency funding plans, stress testing, portfolio management, and operational readiness. Thus, institutions should shift their emphasis, not exclusively but noticeably, towards financial resilience.

It’s not just a case of individual risks rising or falling—it’s that interconnections among risks are tightening.

At OSFI, our job is to anticipate how these stresses could evolve and guide institutions to maintain resilience while facing them. Our concern is not isolated to one segment. It’s systemic. We’re entering a cycle where sound risk management, prudent governance, and resilience will matter more than ever.

That is why we are emphasizing the importance of adaptability— not just strength. Strength may weather a storm. But resilience means you can withstand the storm, recover, and be ready for the next crisis.

The Role of OSFI – Adaptation and Action

OSFI is evolving too.

Our expanded mandate reinforces our responsibility to contribute to public confidence in the Canadian financial system. Not just through financial stability, but also through integrity and security –which are by their nature prudential risks. We have a sharper focus on corporate governance, compliance risk management, and technology-related risks— all critical to institutional resilience.

This means we expect institutions to do more than maintain strong balance sheets. Institutions must cultivate a forward-looking mindset—remaining vigilant to emerging risks, agile in their response to evolving threats, and resilient under pressure.

OSFI remains focused on outcomes—resilient institutions that can manage risk, absorb shocks, and protect depositors and policyholders.

Update on the Supervisory Framework Post-Implementation Review and its Guides to Intervention

Through our updated Supervisory Framework, OSFI is taking deliberate steps to promote resilience in the face of rising complexity and interconnected risks. This framework clarifies how we assess risk and outlines how we expect institutions to align with prudential outcomes.

As some of you may know, over the last few months, we met with some of our industry stakeholders and regulatory partners. Our goal was to collect direct feedback on the implementation of our new supervisory framework.

So let me start by thanking every institution that contributed to this effort; your feedback is a very important part of this post‑implementation review and is invaluable to OSFI.

We are currently analyzing all the feedback we collected. The resulting insights will guide targeted refinements that strengthen supervisory effectiveness and the way we work internally or with our external partners. We will share themes from the review with industry in the fall.

In parallel, OSFI is modernizing its guide to intervention for federally regulated deposit‑taking institutions. The updated guide will align intervention tools with OSFI’s expanded mandate, risk appetite statement, and the new Supervisory Framework. At the same time, it will integrate lessons from recent interventions, feedback collected as part of the post-implementation review, and emerging national‑security considerations.

Publication is planned for the first quarter of fiscal year 2026-27.

We are also in the process of updating the rest of our intervention guides.

Importance of effective risk governance

Let me say a few words about risk governance.

Strong governance starts at the top. Boards and senior management play a critical role in setting the tone, allocating risk ownership, and holding one another accountable.

Corporate governance, compliance risk management, and technology-related risks are closely tied to the role of boards and senior management. Their accountability for effective oversight and timely action is paramount.

While our expectations of boards have not changed, the environment in which they operate has. We’re now in an era of heightened uncertainty.

We expect risk management to be embedded in business decisions—not delegated or siloed. Culture plays a role, yes—but what matters most is that governance structures are effective, responsive, and able to drive the right outcomes under pressure.

Institutions that demonstrate sound governance and a clear line of sight from boardroom to business line will be better positioned to meet the challenges ahead.

Put simply: risk governance is the bridge between OSFI’s expectations and institutional action.

Overview of today’s agenda

Before we move into the technical portion of today’s webcast, here’s a quick overview of the day’s agenda. We’ll begin with a session on the risk environment and OSFI’s supervisory strategies, presented by Dan Sauls and Patrick Clermont.

Next, John Ommanney and Michele Harris will deliver a Year Two update on our Integrity and Security mandate—highlighting how this work is evolving and what it means for institutions.

After a short break, we’ll move into two concurrent breakout sessions. One will focus on financial resilience in the banking sector, the other on resilience in the insurance sector—covering capital, liquidity, and mortgage risk.

In the banking stream, we’ll hear from Gaspar Csete, Sébastien Daniels, and Neville Arjani. In the insurance stream, Bruce Langstroth and Régis Dahany will join moderator Patrick Clermont to share key supervisory insights.

We’ll close the day with remarks from Superintendent Peter Routledge.

It’s a full agenda—one that reflects the complexity of today’s risk landscape and the importance of coordinated, forward-looking supervision.

Closing and transition to the technical session

Before we move into the rest of today’s sessions, I want to leave you with a few final thoughts.

At OSFI, we believe that sound risk management doesn’t happen in a vacuum. Today’s event is part of that effort. We want institutions to understand what we expect, why it matters, and how we’re adapting as risks evolve.

So, I encourage you to ask questions, exchange ideas, and challenge assumptions. That’s how we move forward—together.

Thank you again for being here, and I hope you enjoy the rest of the sessions.

I’ll now hand it over to my colleagues.