- with Senior Company Executives, HR and Finance and Tax Executives
- with readers working within the Accounting & Consultancy, Banking & Credit and Insurance industries
Recent comments made by the Superintendent of Financial Institutions signaled possible changes in 2026 to make it easier to obtain a banking license in Canada. This aligns with proposals in the federal 2025 Budget to enhance competition in the Canadian financial sector. The Office of the Superintendent of Financial Institutions (OFSI) also recently announced that it has deprioritized several policy initiatives for 2026 to promote efficiencies and align priorities with key risks.
Supporting Banking Competition
In October 2025, the Superintendent appeared before the Senate Committee on Banking, Commerce and the Economy, and made several comments to the Senate Committee about assisting new entrants. As later highlighted by the Globe & Mail in December 2025, the Superintendent noted "We have to shift our risk appetite internally. We are going to do that in our approvals unit...That will add more competition to the system through credit union entry and innovators..."
The Superintendent committed to returning to the Senate Committee, to report on OSFI's efforts in 2026 to "make it easier for institutions to choose to enter our [federal banking] system".
The Superintendent's comments followed the Competition Bureau launching a review in September 2025 of the barriers faced by small and medium-sized businesses ("SMEs") seeking financing. In December 2025, it indicated that its upcoming Market Study will consider the competitive dynamics in the SME financing sector, barriers to a lender's entry or expansion in providing financing to SMEs, and barriers to SMEs switching lenders.
As detailed in our bulletin 2025 Federal Budget: Highlights Affecting Financial Services, there are multiple other measures proposed by the federal government to enhance competition in the banking sector.
Adjusting Priorities to Risks
On January 8, 2026, OSFI updated its policy scheduleand announced several changes to its guidance initiatives planned for this year:
- Cancelling a consultation on revisions to Guideline B-12 on Interest Rate Risk Management;
- Deferring the consultation on the disclosure expectation for financed emissions related to off-balance sheet assets under management under Guideline B-15: Climate Risk Management, and deferring the implementation to a future date; and
- Advancing the Guide to Administrative Monetary Penalties (AMPs), which is now to be published on January 29, 2026.
In line with this approach, OSFI advised it will also wind down its Climate Risk Forum, noting this decision "reflects the sector's growing maturity, streamlines engagement, and allows us to focus on core supervisory priorities while maintaining clear expectations through existing guidance." OSFI previously announced that it would not be advancing a full review of its Corporate Governance Guideline in 2026.
At the same time, OSFI is holding the Domestic Stability Buffer ("DSB") to see how events in 2026 impact the economy. OSFI announced on December 18, 2025, that it would maintain the DSB at 3.5% of total risk-weighted assets for Canada's largest banks. OSFI noted that "low credit spreads and high earnings multiples remain a feature of capital markets in Canada and abroad", but reflected that "global uncertainty, including geopolitical risks, continues to shape the overall risk environment" and "credit quality is vulnerable to trade-related headwinds".
Overall, OSFI reiterated in its recent releases its commitment to make regulatory adjustments and prioritize efforts where they matter most, without compromising financial system resilience.
Looking Forward
Institutions that are considering applying for a banking license are encouraged to review their governance framework, risk management framework, key product and service terms, operational processes, primary policies, and capital financing arrangements with their legal advisors. New applicants that are ready sooner than later may benefit from the proposed efficiencies before other interested applicants.
OSFI's next quarterly policy release is scheduled for January 29, 2026. It is now expected to cover the finalized Liquidity Adequacy Requirements (LAR) Guideline (2026), a consultation on Credit Risk Management across key lending areas, a consultation on new "Senior Leader Accountability" corporate governance expectations, and a Crypto-asset exposure disclosure notice.
The related industry day is scheduled for February 12, 2026, to give stakeholders further insight on the items included in the quarterly release and the opportunity to ask related questions.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
