The Office of the Superintendent of Financial Institutions (OSFI), in remarks by Superintendent Peter Routledge, described how its Semi-Annual Risk Outlook has evolved since the 2025–2026 Annual Risk Outlook while keeping the same four core supervisory risk areas: integrity and security risk, wholesale credit risk, funding and liquidity risk, and real estate secured lending and mortgage risks. The update highlighted heightened uncertainty tied to tariffs and trade protectionism alongside continued weakness in the Canadian housing market. Key shifts include particular softness in condo markets in the Greater Toronto Area and Greater Vancouver Area and a gradual rise in mortgage delinquencies from historically low levels, especially in variable-rate fixed-payment mortgages, with higher delinquencies also noted among investor and self-employed borrowers. OSFI set out supervisory responses including strengthening institutional preparedness for stress events, heightened monitoring of liquidity and funding profiles with attention to material foreign operations, and continued refinement of supervisory tools and stress testing; industry consultations have also recently concluded on revisions to the Liquidity Adequacy Requirements Guideline and a proposed Internal Liquidity Adequacy Assessment Process. On mortgage risk management, Routledge pointed to underwriting changes implemented since 2012 under Guideline B-20 and related supervisory communications, and said OSFI has reinforced expectations on blanket appraisals and appraisal timing; systemically important banks’ Common Equity Tier 1 ratios averaged 13.7% in the most recent quarter, 220 basis points above the floor. OSFI expects to announce further rescissions of guidelines and advisories on November 20 as part of its ongoing regulatory efficiency work, alongside a risk-based supervisory approach that calibrates intensity to institutions’ risk profiles, size, and complexity.
Office of the Superintendent of Financial Institutions 2025-10-10
Office of the Superintendent of Financial Institutions updates its Semi-Annual Risk Outlook with trade and housing vulnerabilities and sets November 20 for further guidance rescissions
The Office of the Superintendent of Financial Institutions (OSFI) highlighted evolving risks in its Semi-Annual Risk Outlook, focusing on integrity, security, wholesale credit, funding, liquidity, and real estate lending risks. Key concerns include softness in Toronto and Vancouver condo markets, rising mortgage delinquencies, and uncertainty from trade protectionism. OSFI is enhancing stress preparedness, liquidity monitoring, and supervisory tools, with further guideline rescissions expected on November 20.