Opening remarks to Standing Committee on Banking, Commerce and the Economy, November 2, 2023

Madame Chair and members of the committee.

Thank you for the opportunity to join you today.

As Superintendent of Financial Institutions, one of my jobs is to oversee responsible and sustainable mortgage lending by federally regulated financial institutions.

In recent years, household debt has increased substantially.

This threatens lenders with increasing probability of defaults.

Lenders we regulate underwrite 80% of all mortgages in Canada.

We are and have been working to address this risk by:

• Setting clear expectations for mortgage underwriting in Guideline B-20.
• Requiring lenders to adopt a consistent approach for calculating debt serviceability measures through the minimum qualifying rate.
• Implementing new capital requirements for variable rate fixed mortgages.
• Increasing domestic stability buffers of our largest banks from 0.5% to 3.5%.

The combination of these policies and others help ensure:

• Canadians can manage their mortgage during unexpected or challenging times
• Lenders appropriately manage risks to their loan books
• Lenders are adequately capitalized to respond to defaults

This contributes to the stability of the financial system and public confidence.

And with that, I am pleased to answer your questions.