Opening remarks to the Standing Senate Committee on Banking, Commerce and the Economy (BANC) – June 4, 2026

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Good afternoon, Mr. Chair and members of the Committee. Thank you for the invitation to appear today.

Across the global financial system, risk is re-intensifying. Geopolitical conflict, trade tensions, technological disruption, cyber threats fueled by artificial intelligence, affordability pressures, and the prospect of slower global growth are contributors to this trend.

Canada’s financial system must not only remain resilient in this environment, but also support growth, innovation, and competitiveness. OSFI is adapting its approach to help ensure Canadian financial institutions do both. We seek to avoid the “stability of the graveyard” in which a docile, risk-averse financial system impedes prosperous growth. OSFI is an actor in our financial ecosystem and we have an obligation to ensure our own risk appetite does not fall into this trap.

A strong and resilient financial system supports lending through stress, maintains confidence during periods of heightened uncertainty, and helps households and businesses continue to access financial services when times get hard.

A resilient financial system is not one that avoids lending or innovation. It is one that can continue supporting the economy through periods like the present in which innovative opportunity and uncertainty mix and thereby create volatility.

That is why OSFI is adapting its supervisory approach to place greater emphasis on early risk identification, clearer accountability, operational resilience, and more focused, risk-based supervision.

We are also working to reduce unnecessary complexity and improve clarity in our regulatory framework. Smart oversight does not require unnecessary complexity. We are prioritizing the areas that matter most from a prudential perspective while removing duplication and improving the effectiveness of our regulatory guidance and supervisory tools.

In taking calibrated actions, OSFI recognizes the importance of innovation, competition, and new entrants in Canada’s financial sector. We are taking a more proportionate and streamlined approach in areas where it can support growth and improve responsiveness while maintaining our financial system’s resilience.

We have a particular focus on small- and medium-sized businesses, which play an essential role in Canada’s economy, adding to the nation’s innovation and productivity. Access to financing for SMEs is important, and I understand the Committee’s interest in whether prudential regulation may affect that access.

OSFI has a responsibility here, but so to do Canada’s financial institutions, particularly banks. Those players occupy a privileged position in our economy and with great privilege comes great responsibility. To complement our work as well as the support provided to Canadian businesses by the federal government, banks have a tremendous opportunity to adjust their business models and risk appetites to support hard-working entrepreneurs who, if successful, create long-term prosperity that benefits Canada and Canada’s financial institutions.

Canada’s financial institutions remain well capitalized, well regulated, healthily profitable, and resilient. OSFI’s role is to help preserve that resilience while supporting a financial system that serves Canadians, businesses, and the broader economy during an era of extraordinary uncertainty and opportunity.

Thank you. I would be pleased to answer your questions.