ARCHIVED - Office of the Superintendent of Financial Institutions Canada

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SECTION III: SUPPLEMENTARY INFORMATION

 

III.1 Links to Government of Canada's Outcomes

OSFI's strategic outcomes, supported by its plans and priorities, are intrinsically aligned with broader government outcomes, specifically strong economic growth, income security and employment for Canadians, and a safe and secure world through international co-operation, as identified in the TBS report Canada's Performance 2007.
The following table summarizes the linkages between OSFI's strategic outcomes, program activities and the Government of Canada's Outcomes. The specific linkages are described in more detail after the table.

 

Strategic Outcome # 1: To regulate and supervise to contribute to public confidence in Canada's financial system and safeguard from undue loss.
	Actual Spending 2007-08 ($ millions)			Alignment to Government of Canada Outcome Area
	Budgetary	Non-budgetary	Total
Program Activity 1.1 Regulation and Supervision of Federally Regulated Financial Institutions	$72.8		$72.8	Strong economic growth A safe and secure world through international co-operation
Program Activity 1.2 Regulation and Supervision of Federally Regulated Private Pension Plans	$5.8		$5.8	Strong economic growth Income security for Canadians
Program Activity 1.3 International Assistance	$2.0		$2.0	Strong economic growth A safe and secure world through international co-operation
Strategic Outcome #2: To contribute to public confidence in Canada's public retirement income system.
Program Activity 2.1 Office of the Chief Actuary	$5.1		$5.1	Income security for Canadians

 

Strong Economic Growth

A properly functioning financial system, in which consumers have a high degree of confidence, makes a material contribution to Canada's economic performance. OSFI supervises and regulates more than 450 federally regulated financial institutions, and intervenes in a timely manner to protect depositors and policyholders, while recognizing that not all failures can be prevented.

During 2007-2008, OSFI focussed on assessing the impact of volatile credit and financial markets on FRFIs’ liquidity and capital levels.

Income Security and Employment for Canadians

OSFI supervises and regulates more than 1,300 pension plans covering employees in federally regulated areas of employment, and works to promote responsible pension plan risk management, governance and actuarial practices.

During 2007-2008, OSFI emphasized the need for plan administrators to assess their exposure to market and other stresses, to consider their risk tolerance, and to take action to manage risk appropriately.

Canada has set in place a public pensions system that is expected to be sustainable and affordable well into the future in the face of changing demographic conditions. The Office of the Chief Actuary (OCA) provides appropriate checks and balances on the future costs of the different pension plans and social programs that fall under its responsibilities.

During 2007-2008, the OCA produced and tabled before Parliament actuarial reports on the Canada Pension Plan, various public sector employee pension and insurance plans, and the Canada Student Loans Program.

A Safe and Secure World through International Cooperation

OSFI supports the government's priority for a safe and secure world by contributing to the fight against terrorism financing and money laundering. OSFI's focus relates to the guidance and supervisory review of the operation of financial institution programs to comply with anti-money laundering/anti-terrorism financing (AML/ATF) requirements.

During 2007-2008, OSFI turned the focus of its AML/ATF assessment program to the life insurance sector, and found that progress had been made in the development of effective AML/ATF programs. However, OSFI intervened where necessary to ensure institutions addressed weaknesses and deficiencies that had been identified.

Canada and other G-7 governments recognize that upgrading the supervisory capacity of emerging market supervisory authorities can enhance the stability of the global financial system. Canada plays an important role in this regard, in part through OSFI's technical assistance program, which helps selected emerging market economies to improve the supervisory systems for their financial institutions in line with international banking and insurance supervisory standards.

During 2007-2008, OSFI's International Advisory Group (IAG) delivered several bilateral or multilateral programs, sometimes in partnership with other technical assistance providers, in some 30 countries, many of which necessitated follow-up visits.

 

III.2 Financial and Other Tables

This section presents a number of financial tables that detail OSFI's Expenditures, Revenues and Statutory Payments for 2007-2008. Tables 1 and 2 are provided in accordance with Treasury Board requirements. Tables 3, 4A, 4B, 5, 6, 7 and 8 provide additional information on Respendable and Non-Respendable Revenue, User Fees, Service Standards for External Fees, Responses to Parliamentary Committees, Internal Audits and Travel Policies, according to Treasury Board requirements. (NOTE: In accordance with TBS guidelines, tables 3, 4A, 4B, 5, 6, and 7 do not form part of this document but links are provided. A link is also provided to the Financial Statements, termed Table 8.)

Background

Overall, OSFI recovered all its expenses for the fiscal year 2007-2008 based on the recording of its revenues and expenses on a full accrual accounting basis according to Canadian Generally Accepted Accounting Principles (GAAP) for the private sector. The following tables provide details on OSFI's spending compared to plan as detailed in the 2007-2008 Report on Plans and Priorities. 

Further details on OSFI's finances are available in its Audited Financial Statements, which are published in OSFI's Annual Report. OSFI's annual reports can be accessed on OSFI's web site under Organization / Reports/ Annual Reports.

NOTE: OSFI operates on an accrual basis and the following tables are reported on a modified cash basis, hence there are differences between the audited financial statements and the following tables. Typically the differences result from the accounting treatment of capital expenditures and accounts receivable.

Table 1: Comparison of Planned to Actual Spending (including average full-time equivalents)

OSFI has four program activities: (1) Regulation and Supervision of Federally Regulated Financial Institutions; (2) Regulation and Supervision of Federally Regulated Private Pension Plans; (3) International Assistance; and (4) Office of the Chief Actuary. The table below provides a comparison of OSFI's 2007-2008 planned versus actual spending by program activity, and a comparison to actual spending in the two previous fiscal years.

The amounts shown in Table 1 reflect net spending: total expenditures less total revenue. As OSFI must fully recover its expenditures or costs for all programs other than the Office of the Chief Actuary, the planned spending is zero on a modified cash basis.  OSFI fully recovered its costs on an accrual basis as shown in its audited financial statements; however differences between the accounting methodologies give rise to fluctuations from year to year in spending levels. Table 1 below illustrates such fluctuations in actual spending.

($ thousands)	2005–2006 Actual	2006–2007 Actual	2007–2008
			Main Estimates	Planned Spending	Total Authorities	Actual
(1) Regulation and Suprvision of Federally Regulated Financial Institutions	(6,757)	4,150	-	-	-	(3,931)
(2)  Regulation and Supervision of Federally Regulated Private Pension Plans	1,584	447	-	-	-	(1,402)
(3) International Assistance	380	273	-	-	-	379
(4)  Office of the Chief Actuary	32	434	784	784	873	603
Total	(4,761)	5,304	784	784	873	(4,351)
Less: Non‑Respendable revenues	805	227	-	-	-	374
Plus: Cost of services received without charge*	438	658	-	-	-	113
Net Cost of Program	(5,128)	5,735	784	784	873	(4,612)
Average Full-Time Equivalents	434	446	461			459

* 2007-2008 includes services from the Office of the Auditor General ($85K) and Department of Justice ($28K)

On the modified cash basis of accounting, OSFI had a greater inflow of funds than outflows during 2007-2008.  This is largely the result of collections during the year of outstanding accounts receivable pertaining to 2006-2007, and of base assessments and pension fees for the current year, which included amortization expense (a non-cash item) related to capital acquisitions in prior years. These timing differences cause fluctuations from year to year in OSFI's spending levels on a modified cash basis, and explain the total inflow of $4,351 thousand in 2007-2008 versus the previous year's net expenditures of $5,304 thousand. OSFI also incurred lower capital spending than planned due to later start dates and deferrals to fiscal year 2008-2009 of Information Management/ Information Technology projects.

Table 2: Voted and Statutory Items

Vote or Statutory Item	Truncated Vote  or Statutory Wording	2007–2008 ($ thousands)
		Main Estimates	Planned Spending	Total Authorities	Total Actual
30	Operating expenditures	784	784	873	603
	Total	784	784	873	603

This table summarizes Parliament's voted appropriations, or funds, to OSFI. OSFI receives an annual parliamentary appropriation pursuant to section 16 of the OSFI Act to support its mandate relating to the Office of the Chief Actuary. 

In this fiscal year, OSFI was granted $873 thousand (2007: $768 thousand). This parliamentary appropriation is to defray the expenses associated with the provision of actuarial services to various public sector employee pension and insurance plans, including the Canadian Armed Forces, the Royal Canadian Mounted Police, the federally appointed judges and Members of Parliament. 

Please note that the appropriations are calculated using a modified cash basis of accounting rather than full accrual accounting. This difference will give rise to variances between OSFI's use of funds and appropriated funds.

In keeping with TBS guidelines, the following tables are available only electronically.

Table 3: Sources of Respendable and Non-Respendable Revenue
Table 4A: User Fees Act
Table 4B: Policy on Service Standards for External Fees
Table 5: Response to Parliamentary Committees and External Audits
Table 6: Internal Audits and Evaluations
Table 7: Travel Policies

For supplementary information on these tables, please visit Treasury Board of Canada Secretariat website’s Estimates / 2007-2008 Departmental Performance Reports: http://www.tbs-sct.gc.ca/dpr-rmr/st-ts-eng.asp

Table 8: Financial Statements

OSFI's Audited Financial Statements are published each year in OSFI's Annual Report, which is tabled in Parliament in the fall. The 2007-2008 Annual Report can be found on OSFI's Web site under Organization / Reports / Annual Reports.

 

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