ARCHIVED - Office of the Superintendent of Financial Institutions - Supplementary Tables

This page has been archived.

2010-11
Departmental Performance Report

Office of the Superintendent of Financial Institutions

Supplementary Information (Tables)

---

Table of Contents

• Sources of Respendable and Non-respendable Revenue
• User Fees/External Fees
• Green Procurement
• Internal Audits and Evaluations

Sources of Respendable and Non-Respendable Revenue

This table identifies revenues by program activity received from sources both internal and external to the government. For 2010-2011, OSFI’s total revenues were $90.2 million, excluding non-respendable revenue of $0.2 million for the collection of Late and Erroneous Filing Penalties. The respendable revenues are largely comprised of asset- or premium-based industry assessments, surcharge assessments to staged institutions, and user fees for specific services related to Regulatory Approvals.

Respendable Revenue

The table below illustrates sources of Respendable Revenue on a modified cash basis; however, OSFI recovers its costs through assessments and user fees billed on the accrual basis of accounting. The differences between the accounting methodologies give rise to fluctuations in revenues from year to year.

Commencing in the 2009-2010 Estimates cycle, the resources for the Internal Services program activity are displayed separately from other program activities; they are no longer distributed among the remaining program activities. Comparative figures for 2008-2009 have been restated to conform to the presentation adopted in 2009-2010. 

As OSFI must fully recover its costs for all programs other than the Office of the Chief Actuary, which is partially funded by a parliamentary appropriation, respendable revenues in the Main Estimates were allocated to each program, including Internal Services, to match revenues to costs and plan spending at zero on a modified cash basis. When actual revenues are billed and received, an estimate is made to allocate a portion of this revenue to Internal Services. The difference in methodologies used to plan versus record actuals accounts for some of the variances between the Main Estimates and actual revenues in each of the program activities; as such, OSFI will continue to refine its methodology for allocating actual revenues between program activities during 2011-2012.

Respendable Revenues
($ millions)

Program Activity	Actual 2008-2009	Actual 2009-2010	2010-2011
			Main Estimates	Planned Revenue	Total Authorities	Actual
(1) Regulation and Supervision of Federally Regulated Financial Institutions
Base Assessments	$0.0	$0.0	$51.0	$51.0	$51.0	$43.8
User Fees and Charges	$0.9	$0.6	$3.4	$3.4	$3.4	$0.5
Cost-Recovered Services	$0.8	$0.5	$0.2	$0.2	$0.2	$0.2
Subtotal	$1.7	$1.1	$54.6	$54.6	$54.6	$44.5
(2) Regulation and Supervision of Federally Regulated Private Pension Plans
Pension Plan Fees	$8.2	$8.5	$5.3	$5.3	$5.3	$7.7
(3) International Assistance
Cost-Recovered Services	$1.6	$1.7	$1.7	$1.7	$1.7	$0.5
(4) Actuarial Valuation and Advisory Services
User Fees and Charges	$0.1	$0.0	$0.1	$0.1	$0.1	$0.1
Cost-Recovered Services	$4.7	$5.3	$3.3	$3.3	$3.3	$4.2
Subtotal	$4.8	$5.3	$3.4	$3.4	$3.4	$4.3
(5) Internal Services
Base Assessments	$81.7	$90.5	$39.1	$39.1	$39.1	$27.9
Pension Plan Fees	$0.0	$0.0	$1.5	$1.5	$1.5	$0.0
User Fees and Charges	$1.6	$2.9	$0.0	$0.0	$0.0	$4.6
Cost-Recovered Services	$0.5	$1.1	$2.8	$2.8	$2.8	$0.6
Subtotal	$83.8	$94.5	$43.4	$43.4	$43.4	$33.1
Total Respendable Revenue	$100.1	$111.1	$108.3	$108.3	$108.3	$90.1

The decrease in respendable revenues in 2010-2011 from the previous year is explained in the “Summary of Performance” and “Expenditure Profile” sections of this report. In addition, on the modified cash basis of accounting, OSFI had a lower inflow of funds than outflows than planned during 2010-2011. This is largely the result of higher accounts receivables driven by the later than usual billing of interim base assessments to the Life and Property & Casualty (P&C) industries for the current year, which explains the variances between 2010-2011 actuals and total authorities.

[text version]

Total 2010-2011 respendable revenues were $90.1 million, a decrease of $21.0 million  (18.9%) over the previous year’s total of $111.1 million. Base assessments of $71.8 million accounted for 79.6% of total revenue and represented a decrease of $18.8 million (20.8%) from the previous year. This decrease is attributed to the later than usual billing of assessments to the Life and P&C industries resulting in a significant increase in accounts receivable at as March 31, 2011.

[text version]

Cost recovered services revenue was $5.6 million, down $3.0 million (34.9%) from the previous year, largely due to the termination of the Memorandum of Understanding (MOU) with the Canadian International Development Agency (CIDA) as a result of the cessation of OSFI’s International Assistance program activity in the first quarter of 2010-2011.  User fees and charges were $5.1 million, up $1.6 million (45.7%) from the previous year while pension plan fees decreased by $0.8 million (9.4%) to $7.7 million. This was driven mainly by a decrease in the pension fee rate to $22 per member in 2010-2011 from $24 per member in the previous year.

Base assessments increased from 76.3% of total revenue in 2006-2007 to 79.6% in 2010-2011, while pension plan fees increased from 6.7% to 8.6% and User fees and charges increased from 4.7% to 5.7%. Cost recovered services decreased over the same period from 12.3% to 6.2% largely due to the expiry, on October 31, 2007, of the MOU with the large banks for the implementation of the internal ratings-based approach (IRB) of the New Capital Adequacy Framework (Basel II) and the expiry of the CIDA MOU noted above.

Non-Respendable Revenue

OSFI’s non-respendable revenues are entirely related to late and erroneous filing penalties. Effective 2002-2003, OSFI began collecting late and erroneous filing penalties from financial institutions that submit late and/or erroneous financial and corporate returns. On August 31, 2005 the Administrative Monetary Penalties (OSFI) Regulations came into force. These Regulations implement an administrative monetary penalties regime pursuant to which the Superintendent can impose penalties in respect of specific violations, as designated in the schedule to the Regulations. These Regulations incorporate the late and erroneous filing penalty regime and replace the Filing Penalties (OSFI) Regulations. These penalties are billed quarterly, collected and remitted to the Consolidated Revenue Fund. By regulation, OSFI cannot use these funds to reduce the amount that it assesses the industry in respect of its operating costs.

Non-Respendable Revenues
($ millions)

Program Activity	Actual 2008-2009	Actual 2009-2010	2010-2011
			Planned Revenue	Actual
1) Regulation and Supervision of Federally Regulated Financial Institutions
Late and Erroneous Filing Penalties (LEFP)	$0.5	$0.0	$0.7	$0.2
Total Respendable Revenue	$0.5	$0.0	$0.7	$0.2

The 2010-2011 Filing Penalty revenues of $0.2 million were lower than planned due to more timely and accurate filing of financial and corporate returns by financial institutions.

User Fees Reporting

Table A: User Fees

Other Information:

In July 2000, the Canada Customs and Revenue Agency ruled that most of the service charges are exempted from GST under the Excise Tax Act.

A fee is either identified as “Regulatory” (R) or “Other Products and Services” (O).  A Regulatory fee relates to an activity undertaken by a department that is integral to the effectiveness of a program and successful achievement of the program mandate requires moderating, directing, testing, or approving the actions of external parties. 

The full cost is based on the fiscal year salary levels according to collective agreements, the fiscal year Treasury Board benefit factors and OSFI’S factor for indirect costs.

¹Note: According to prevailing legal opinion, where the corresponding fee introduction or most recent modification occurred prior to March 31, 2004:

• the performance standard, if provided, may not have received parliamentary review; and
• the performance standard, if provided, may not respect all establishment requirements under the User Fee Act (e.g. international comparison; independent complaint address); and
• the performance result, if provided, is not legally subject to section 5.1 of the UFA regarding fee reductions for unachieved performance service standards may not have received parliamentary review.

Table B: User Fees Totals

	2010-11 ($ thousands)			Planning Years ($ thousands)
	Forecast Revenue	Actual Revenue	Full Cost	Fiscal Year	Forecast Revenue	Estimated Full Cost
Sub-Total (R)	1,075	532	532	2011-12	846	846
				2012-13	846	846
				2013-14	846	846
Sub-Total (O)	78	103	347	2011-12	78	326
				2012-13	78	334
				2013-14	78	342
Total	1,153	635	879	2011-12	924	1,172
				2012-13	924	1,180
				2013-14	924	1,188

 

Table C - External Fees

Superintendent Non-deemed Approvals Except Deposit and Trust Agreements and Letters of Credit

External Fee	Service Standard2	Performance Results3	Stakeholder Consultation
Approval to maintain a representative office of a foreign bank Reservation of a name Accreditation of a provincial reinsurer	90% will be processed in less than 60 calendar days of receipt	95% were processed in less than 60 calendar days of receipt	Although the number of approvals subject to a Regulatory fee represents 25% of the total approvals processed in 2010-2011, OSFI applies these standards to all application for regulatory approvals in order to provide a better quality of service.4

 

Ministerial Approvals

External Fee	Service Standard2	Performance Results3	Stakeholder Consultation
Letters patent of incorporation Letters patent of continuance Order permitting a foreign bank to carry on banking business in Canada Order approving the insuring in Canada of risks by a foreign body corporate Exemption from material banking group status Approval for a foreign bank or entity associated with a foreign bank to have a financial establishment in Canada Approval for a foreign bank or entity associated with a foreign bank in respect of investments and activities in Canada	80% will be processed in less than 90 calendar days of receipt	98% were processed in less than 90 calendar days of receipt	Although the number of approvals subject to a Regulatory fee represents 25% of the total approvals processed in 2010-2011, OSFI applies these standards to all application for regulatory approvals in order to provide a better quality of service.4

 

Precedents/ Rulings/ Interpretations

External Fee	Service Standard2	Performance Results3	Stakeholder Consultation
Written, precedent-setting ruling relating to the quality of capital Written interpretation of Acts, regulations, guidelines or rulings	80% will be processed in less than 180 calendar days of receipt	100% were processed in less than 180 calendar days of receipt	Although the number of approvals subject to a Regulatory fee represents 25% of the total approvals processed in 2010-2011, OSFI applies these standards to all application for regulatory approvals in order to provide a better quality of service.4

 

Non-precedential Confirmations of Quality of Capital

External Fee	Service Standard2	Performance Results3	Stakeholder Consultation
Written, non-precedent-setting confirmation of quality of capital	90% will be processed in less than 60 calendar days of receipt	100% were processed in less than 60 calendar days of receipt	Although the number of approvals subject to a Regulatory fee represents 25% of the total approvals processed in 2010-2011, OSFI applies these standards to all application for regulatory approvals in order to provide a better quality of service.4

 

Copies of Corporate Documents and Certificates of Confirmation

External Fee	Service Standard2	Performance Results3	Stakeholder Consultation
Copies of any one of the following corporate documents (per request and per body corporate): (a) a certificate of confirmation; (b) a certified copy of letters patent or of incorporation or amalgamation documents; and (c) the corporate history of a body corporate	90% will be processed  within 2 business days of receipt	100% were processed within 2 business days of receipt	Although the number of approvals subject to a Regulatory fee represents 25% of the total approvals processed in 2010-2011, OSFI applies these standards to all application for regulatory approvals in order to provide a better quality of service.4

 

Access to Information User Fees

External Fee	Service Standard2	Performance Results3	Stakeholder Consultation
Fees charged for processing access requests filed under the Access to Information Act	Response provided within 30 days following receipt of request; the response time may be extended pursuant to section 9 of the Access to Information Act. Notice of extension to be sent within 30 days after receipt of request. The Act provides fuller details.	Statutory deadlines met 100% of the time	The service standard is established by the Access to Information Act and the Access to Information Regulations. Consultations with stakeholders were undertaken by the Department of Justice and the Treasury Board Secretariat for amendments done in 1986 and 1992.

Other Information: None

² As established pursuant to the Policy on Service Standards for External Fees:

• service standards may not have received parliamentary review; and
• service standards may not respect all performance standard establishment requirements under the UFA (e.g. international comparison; independent complaint address).

³ Performance results are not legally subject to section 5.1 of the UFA regarding fee reductions for unachieved performance.

⁴In 2010-2011, OSFI conducted three confidential survey consultations with deposit-taking institutions, executives of the FIs that OSFI regulates, and life insurance companies.  Results showed that a strong majority of respondents were satisfied with OSFI in processing applications for regulatory approvals and believes that OSFI’s approval process is timely and efficient.  From time to time, OSFI receives letters of appreciation from applicants thanking OSFI on the quality of its regulatory approval process.

Green Procurement

Part A: Green Procurement Capacity Building

Activity	Target as % (as reported in 2010–11 RPP)	Actual Results as %	Description/Comments
1a. Training for Procurement and Materiel Management Staff	50%	50%	The training of the Procurement and Materiel Management Staff will be achieved by completing the online Canada School of Public Service course - C215 Green Procurement.
1b. Training for Acquisition Cardholders	10%	10%	The training of some Acquisition Cardholders was achieved through green conferences for key cardholders.
2. Performance Evaluations	50%	0%	Although green procurement was not explicitly identified in the performance evaluations for the two managers responsible for procurement, these managers sought and took advantage of green options where available.
3. Procurement Processes and Controls	N/A	N/A	OSFI’s procurement needs are largely met by government-wide commodity management processes and vehicles established by Public Works and Government Services Canada (PWGSC). Environmental benefits achieved are the same as those identified by PWGSC in the establishment of these processes and vehicles.

Part B: Use of Green Consolidated Procurement Instruments

Good/Service	Target as % (as reported in 2010–11 RPP)	Actual Results as %	Description/Comments
Paper	75%	75%	Paper is procured against PWGSC green consolidated instruments.
Printers	50%	100%	All new leases for printers were against PWGSC green consolidated instruments.

Internal Audits and Evaluations

Internal Audits (2010-2011 reporting period - covering 2009-2010 and 2010-2011 planning period)

1. Name of Internal Audit	2. Internal Audit Type	3. Status	4. Completion Date
Corporate Services - Finance – Revenue	Revenue Business Cycle	Completed	November 2010
Corporate Services - Human Resources Performance Management	Performance Management	Completed	November 2010
Regulation Sector -  Private Pensions Plan Division – Approvals Management and Control Framework	Approvals	Completed	November 2010
Corporate Services – Finance – Contracting for Professional Information Management/Information Technology	Contracting for Professional Information Management/Information Technology	In Progress	June 2011
Superintendent’s Office  - Risk Management	Risk Management	In Progress	2011-12
Supervision Sector – Life Insurance Group – Conglomerates	Risk Assessment & Intervention	In Progress	2011-12
Regulation Sector: Actuarial	Supervision Support	Not yet Started	2011-12
Supervision Sector: Supervision Support Group, Credit Risk Division	Risk Assessment & Intervention – Follow-Up	In Progress	2011-12

OSFI’s Internal Audit group conducts regular internal audits. The Internal Audit Plan is approved one year at a time by the Audit Committee. The 2011-2012 to 2013-2014 audit plan was approved Q3 2010-2011. The audit plan is subject to change from year to year depending on changes to priorities or in the business.