I believe that when the economy works for the middle
class, it works for everyone. Our government
has taken action to support the middle class and to ensure that
economic growth benefits all Canadians. We continue to use our
strong fiscal position to invest in infrastructure, skills and
training, and to protect the environment. And, together with
provincial governments, we strengthened the Canada Pension Plan
to increase the maximum benefit by about 50% over time and help
people retire with dignity.
Crucial to ensuring growth that works for the middle class
and supports equality of opportunity is maintaining a
world-class financial system that is safe, stable and
competitive – with a supervisory and regulatory
framework that safeguards institutions and pushes them to
operate with the well-being of depositors, creditors and
mortgage holders at top of mind.
A long period of low interest rates has increased the burden
of household debt. Our government has taken a series of
measured actions to strengthen underwriting standards for
insured mortgages and to address pockets of housing risk in
We continue to monitor the housing sector to ensure that it
remains stable and resilient to shocks, and are prepared to
take further action if required.
We will not be complacent when it comes to the economic
fortunes of middle-class families, and to the most important
investment that most people will ever make.
In Canada, we believe that supervision is just as crucial as
This is at the core of the 'principles-based' approach to
supervision followed by the Office of the Superintendent of
Financial Institutions (OSFI). By setting principles rather
than just rules, the onus is on the institution to understand
the risks it faces, to be proactive in managing them and to
provide evidence to supervisors of how they are doing this.
This approach gives OSFI the flexibility to adapt its
expectations of institutions to reflect changes in risk, as
institutions adapt to competition, technological innovation and
This approach to supervision complements legislative
standards and strict rules all financial institutions must
meet. The aim is to rein in excessive risk-taking, while
allowing financial institutions to take the reasonable risks
that are fundamental to the functioning of the Canadian
financial system and economy.
In line with international commitments, we have implemented
legislative amendments to bolster the toolkit for managing the
resolution of Canada's largest banks so that, in the highly
unlikely event of a failure, taxpayers are not on the hook to
cover losses. We are also strengthening oversight of financial
market infrastructures that have the potential to pose systemic
or payments system risk.
And to ensure that our legislative framework continues to
support a stable, efficient and useful financial sector, we are
in the midst of a review to inform how the framework might
change as we work to renew it by March 29 2019.
All of these measures are designed to make sure that the
financial system and the economy work for all Canadians.