OSFI Governance Should Evolve with Canada’s Financial System

May 21, 2026 – Since the 2008 global financial crisis, the mandate and activities of the Office of the Superintendent of Financial Institutions (OSFI) have expanded significantly in response to a more complex and rapidly evolving financial system. Yet its institutional structure has not undergone a major review in nearly 30 years, according to a new C.D. Howe Institute report. 

In “Fit for Purpose: Modernizing OSFI’s Governance”, former OSFI Vice Superintendent Jamey Hubbs and Mawakina Bafale recommend that OSFI modernize its governance framework by replacing the institution’s current single-head model with a multi-member structure, including a board of directors supported by advisory councils. They find that such a model could provide a formal mechanism for debating complex trade-offs, challenging internal assumptions, and strengthening decision-making as OSFI’s actions increasingly affect Canadians directly. 

“Canadians have been well served by OSFI’s prudential oversight for decades, but the financial system and the risks surrounding it have evolved significantly,” says Hubbs. “The question is whether OSFI’s governance framework remains fit for purpose in an increasingly complex financial environment.” 

The report notes that OSFI’s governance model is out of step with comparable regulators. Authorities in the UK and Australia, along with newer Canadian regulators such as Ontario’s Financial Services Regulatory Authority and the Ontario Securities Commission, operate under board-led structures. Further, the OECD has highlighted several advantages to this approach, including reduced vulnerability to regulatory capture, stronger judgment in complex principles-based environments, and more effective strategic oversight. 

As OSFI’s responsibilities expand into areas such as cybersecurity, foreign interference, and geopolitical risk, the authors argue that the organization requires broader expertise and stronger oversight mechanisms. Regular appearances before Parliament and a multi-member governance structure would enhance accountability, strengthen legitimacy, and equip OSFI to respond more proactively to emerging risks.  

The report also recommends a formal review of OSFI’s institutional framework at least once every 10 years, noting it has not been comprehensively assessed since the MacKay Task Force nearly three decades ago. 

“Greater transparency and a diverse governing body with specialized expertise would help ensure OSFI remains proactive, accountable, and capable of maintaining Canadians’ trust in the stability of the financial system.” says Bafale, Research Officer at the C.D. Howe Institute. “Good governance leads to good decisions.” 

For more information contact: Jamey Hubbs, Senior Fellow, C.D. Howe Institute and retired Vice Superintendent, OSFI; Mawakina Bafale, Research Officer, C.D. Howe Institute; and Raquel Schneider, Communications Officer, C.D. Howe Institute, 647-805-3918, rschneider@cdhowe.org.  

Read the Full Report  

The C.D. Howe Institute is an independent not-for-profit research institute whose mission is to raise living standards by fostering economically sound public policies. Widely considered to be Canada’s most influential think tank, the Institute is a trusted source of essential policy intelligence, distinguished by research that is nonpartisan, evidence-based and subject to definitive expert review. 

Want more insights like this? Subscribe to our newsletter for the latest research and expert commentary.