ARCHIVED - RPP 2007-2008
Office of the Superintendent of Financial Institutions Canada

2007-2008

2008-2009

2009-2010

$75.9

$76.3

$87.5

2007-2008

2008-2009

2009-2010

380

378

378

1.1.1 Program Sub-Activity: Risk Assessment and Intervention

Description

Monitor and supervise financial institutions; monitor the financial and economic environment to identify emerging issues and risks. Intervene in a timely manner to protect depositors and policyholders while recognizing that OSFI cannot eliminate the possibility of failures.

Related Priority

Ongoing responsibility

• Accurate risk assessments of financial institutions and timely, effective intervention and feedback.

Priority A- Readiness Planning

Ensure OSFI can respond adequately to:

• shocks to the economy as a result of a crisis or pandemic, and
• cyclicality in the industry, e.g. a possible economic downturn.

Priority B - Basel II

• Complete the review and approval of, with a reasonably high degree of confidence, applications that are submitted for approval under the Basel II capital framework, and review OSFI’s practices to align with Basel II requirements.

Priority C - Financial Sector Assessment Program (FSAP) Update / Financial Action Task Force (FATF)

• Participate in FSAP Update and FAFT review and be in a position to deal with any feedback that results from the reviews.

Expected Results

• OSFI uses a modern supervisory process that leads to an accurate overall assessment of the risk profile and control functions of the financial institutions it regulates and supervises.
• In exercising its early intervention mandate, OSFI is proactive in intervening in problem cases regarding the financial institutions it regulates and supervises.
• Risk assessments and management reports are timely and clear.
• Intervention action is commensurate to the seriousness of the problem/issue at hand.
• OSFI’s supervisory framework remains contemporary and assists OSFI in being able to detect prudential issues on a timely basis.
• OSFI will receive an independent view as to whether it develops, maintains and contributes to a regulatory framework that meets or exceeds international minimums.

Performance Measure(s)

• Knowledgeable observers, i.e., industry executives and professionals, are of the view that:
  • OSFI uses a modern supervisory process that is effective and leads to an accurate overall assessment of the risk profile and control functions of the financial institutions it regulates and supervises;
  • exercising its early intervention mandate, OSFI is proactive in intervening in problem cases regarding financial institutions it regulates and supervises;
  • risk assessments and management reports are timely and clear;
  • intervention action is commensurate to the seriousness of the problem/issue.
• Development of supervisory processes to support Pillar I approval and augment the risk matrix.
• OSFI’s target is to receive a successful assessment on the FSAP Update and the FATF review.

2007-2008

2008-2009

2009-2010

$53.5

$53.8

$61.6

1.1.2 Program Sub-Activity: Rule Making

Description

Issuance of guidance and regulations and input into federal legislation affecting financial institutions. Contribute a regulatory perspective to accounting, auditing and actuarial standards as required. Contribute to the development of international prudential rule-making.

Related Priority

Ongoing Responsibility

• A balanced, relevant regulatory framework of guidance and rules for financial institutions that meets or exceeds international minimums.

Priority D – Accounting Standards

• Implement the move from Canadian GAAP to International Financial Reporting Standards (IFRS) by addressing changes to OSFI’s prudential regime, including consideration of changes in accounting for insurance.

Priority E – Minimum Continuing Capital Surplus Requirement (MCCSR)

• Develop and agree on a capital framework for life insurance companies, over a five year period.

Expected Results

• In developing, maintaining and contributing to a regulatory framework that meets or exceeds international minimums, OSFI strikes an appropriate balance between safety and soundness and the need for institutions to compete.
• Regulation, guidelines and other rules developed and issued to industry by OSFI reflect timely, clear and relevant information.
• Competitive, prudent capital rules and regulatory reporting for Canadian FRFIs consistent with economic realities, Basel rules and IAIS guidance for recognizing capital instruments, and significant foreign markets.
• OSFI is able to handle revised accounting and reporting changes, and maintains strategy of using audited financial statement amounts as the starting point for regulatory purposes.
• MCCSR guideline that appropriately addresses risks faced by the life insurance industry and provides a sufficient level of capital for the protection of policyholders as per OSFI’s mandate.

Performance Measure(s)

• Knowledgeable observers, i.e., industry executives and professionals, are of the view that in developing, maintaining and contributing to a regulatory framework meets or exceeds international minimums, OSFI strikes an appropriate balance between safety and soundness and the need for institutions to compete.
• Knowledgeable observers are of the view that regulation, guidelines and other rules developed and issued to industry by OSFI reflect timely, clear and relevant information.
• Through the identification and communication of well articulated positions, OSFI’s prudential issues are considered by Canadian and international committees.  OSFI succeeds in having high priority Canadian issues dealt with appropriately.
• Appropriate capital guidelines are developed, taking account of risks.
• Internal processes and systems are updated to accommodate changes resulting from MCCSR and accounting changes in agreed-upon timelines.

2007-2008

2008-2009

2009-2010

$14.7

$14.8

$17.0

1.1.3 Program Sub-Activity: Approvals

Description

Approvals include those required under the legislation applicable to financial institutions and other approvals for supervisory purposes.

Related Priority

Ongoing Responsibility

• A prudentially effective, balanced and responsive approvals process.

Expected Results

• OSFI’s regulatory approvals result in prudentially sound decisions that are timely, clear and transparent.
• Decisions for deemed approvals and for other legislative approvals are completed within specified time limits.

Performance Measure(s)

• Knowledgeable observers, i.e., industry executives and professionals, are of the view that OSFI’s decisions, as part of the approval process, are timely, clear and transparent.
• Internal sources show that decisions for deemed approvals and for other legislative approvals are completed within specified time limits.

2007-2008

2008-2009

2009-2010

$7.7

$7.7

$8.9

1.2 Program Activity: Regulation and Supervision of Federally Regulated Private Pension Plans

Description

Incorporates risk assessment, intervention, rule making and approvals related to federally regulated private pension plans under the Pension Benefits Standards Act, 1985. The costs for this program are recovered from pension plan fees based on the number of members in each federally regulated pension plan. The costs of this program activity are clearly tracked, however, given the size of this program (less than 5% of OSFI costs), there is only one sub-activity.

Related Priority

Ongoing Responsibility

• Accurate risk assessments of pension plans, timely and effective intervention and feedback, a balanced, relevant regulatory framework, and a prudentially effective and responsive approvals process.

Priority F – Pension Systems and Processes

• Enhance OSFI’s ability to perform as required in an increasingly complex pensions environment.

Expected Results

• OSFI uses a modern supervisory process that leads to an accurate overall assessment of the risk profile of the pension plans that it regulates.
• In exercising its early intervention mandate, OSFI is proactive in intervening in problem cases regarding the pension plans it regulates and supervises.
• Risk assessments and management reports are timely and clear.
• Intervention action is commensurate to the seriousness of the problem/issue at hand.
• Pension systems and processes adequately facilitate pension supervision and approvals.

Performance Measure(s)

• Knowledgeable observers, i.e., industry executives and professionals, are of the view that:
  • OSFI uses a modern supervisory process that leads to an accurate overall assessment of the risk profile of the pension plans that it regulates;
  • in exercising its early intervention mandate, OSFI is proactive in intervening in problem cases regarding the pension plans it regulates and supervises;
  • risk assessments and management reports are timely and clear;
  • intervention action is commensurate to the seriousness of the problem/issue.
• Pension system and process changes are implemented according to agreed-upon timelines.

2007-2008

2008-2009

2009-2010

$6.5

$6.8

$7.0

2007-2008

2008-2009

2009-2010

35

35

35

1.3 Program Activity: International Assistance

Description

This program activity incorporates activities that provide help to other selected countries that are building their supervisory and regulatory capacity. The costs for this program are recovered via Memoranda of Understanding between OSFI and organizations such as the Canadian International Development Agency (CIDA) and the International Monetary Fund (IMF). The costs of this program activity are clearly tracked; however, given the size of this program (less than 5% of OSFI costs), there is only one sub-activity.

Related Priority

Ongoing Responsibility

• Contribute to awareness and improvement of supervisory and regulatory practices for selected foreign regulators through the operation of an International Assistance Program.

Expected Results

• OSFI to contribute to the awareness and improvement of supervisory and regulatory practices for foreign regulators and jurisdictions.

Performance Measure(s)

• Knowledgeable observers are of the view that the technical assistance provided to foreign regulators and jurisdictions by OSFI is relevant and contributes to the awareness and improvement of supervisory and regulatory practices.

2007-2008

2008-2009

2009-2010

$2.0

$2.1

$2.1

2007-2008

2008-2009

2009-2010

7

7

7

Description

The OCA provides a range of actuarial services, under legislation, to the Canada Pension Plan (CPP) and some federal government departments. The OCA estimates long-term expenditures, revenues and current liabilities of the CPP and of long-term future expenditures for Old Age Security programs, and prepares statutory triennial actuarial reports on the financial status of the programs. The OCA also undertakes the actuarial review of the Canada Student Loans Program.

Related Priority

Ongoing Responsibility

• Contribute to ensuring there are financially sound federal government public pension and other programs.

Expected Results

• Provide expert and timely advice in the form of high-quality reports tabled in Parliament, in respect of the CPP.
• Provide expert and timely advice in the form of high-quality reports, in respect of Public Sector Pension and Insurance Plans.
• Provide expert and timely advice in the form of high-quality and timely actuarial reports, in respect of the Canada Student Loans Program.

Performance Measure(s)

• CPP Peer Review Board is of the view that the Chief Actuary provides expert and timely advice in the form of high-quality reports tabled in Parliament, in respect of the CPP.
• The CPP Triennial Actuarial report was completed within legislated timeframes.
• Independent observers are of the view that the Chief Actuary provides expert and timely advice in the form of high-quality reports on the Public Sector Pension & Insurance Plans tabled in Parliament.
• The Public Sector Actuarial Reports met legislative requirements.
• Officials from the Auditor General are of the view that the Chief Actuary provides expert and timely advice in the form of high quality and timely actuarial reports, in respect of the Canada Student Loans Program.
• The Canada Student Loans Actuarial Report met agreed upon requirements.

2007-2008

2008-2009

2009-2010

$6.1

$6.1

$6.2

2007-2008

2008-2009

2009-2010

39

39

39