Opening remarks to the Senate Standing Committee on Banking, Trade and Commerce

Good day Madame Chair and Honourable Senators.

Thank you for the opportunity to appear before your Committee today. I look forward to sharing my thoughts on the issues of housing finance and digital money.

I would like to acknowledge that I am speaking to you from the traditional unceded territory of the Anishnaabeg nation. I am grateful to have the opportunity to be present in this territory. I recognize that those joining us today may work in different traditional Indigenous territory.

A stable housing finance system—with reliably available credit at prudent, risk-based prices—is a pre-requisite for a healthy housing market. OSFI’s role in housing, therefore, centres on preserving and protecting the availability and quality of credit that Canadians require to buy and sell homes.

Our strategy is to ensure the housing finance system—and the Canadian financial system as a whole—have sufficient buffers to absorb bouts of volatility, the timing of which is uncertain but the arrival of which is not in doubt. Having these buffers in place helps ensure credit remains available to support economic activity in times of economic expansion and contraction alike.

Innovation in financial services has accelerated in recent years and, in particular, is encroaching on the multi-faceted concept of money. We call some of these innovations cryptocurrencies, others Stablecoins, still others Decentralized Finance, or DeFi. Each innovation has the potential to add value to Canada’s financial system and each brings with it less well-understood risks, similar to those which have tripped up financial innovations in the past. How to respond to digital money innovations is one of the questions that faces the federal financial safety net, in which OSFI plays a critical role.

When the Governor of the Bank of Canada appeared before this Committee, he was asked about the Bank’s work on this issue. I can tell you OSFI is leveraging the Bank’s work by adapting how we might evaluate the safety and soundness of the financial institutions as digital money proliferates.

In Canada, we are fortunate to have a number of government partners working together to analyze and assess the implications of digital money innovations, such as cryptocurrencies, on our regulatory frameworks. OSFI is proud to play its part in the development of a federal financial oversight framework that continues to evolve and serve the needs of Canadians.

I look forward to contributing to the Committee’s study and to answering the members’ questions.