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2007-08
Departmental Performance Report

Office of the Superintendent of Financial Institutions Canada

Supplementary Information (Tables)

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Table of Contents

• Sources of Respendable and Non-respendable Revenue
• User Fees/External Fees
• Response to Parliamentary Committees and External Audits
• Internal Audits and Evaluations
• Travel Policies

Table 3: 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 2007-2008, OSFI’s total revenues were $90.5 million, including non-respendable revenue of $374 thousand 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. The majority of cost-recovered services in Regulation and Supervision of Federally Regulated Financial Institutions relates to implementing the internal ratings-based approach of the New Basel Capital Accord.

Respendable Revenues

The increase in respendable revenues in 2007-2008 from the previous year is largely due to increases in Base Assessment revenue and increases in Pension Fee Revenue. The 2007-2008 Pension Fee rate was $24.00 per member, 45% higher than the 2006-2007 rate. This rate increase was required in order to recover an accumulated deficit from the last 3 years as a result of directing incremental resources to problem pension plans.

($ thousands)	Actual 2005-2006	Actual 2006-2007	2007‑2008
			Main Estimates	Planned Revenues	Total Authorities	Actual
(1) Regulation and Supervision of Federally Regulated Financial Institutions
Base Assessments	67,726	60,375	70,489	70,489	70,489	70,080
User Fees and Charges	6,268	3,588	2,147	2,147	2,147	3,226
Cost-Recovered Services	3,515	4,248	3,278	3,278	3,278	3,403
(2) Regulation and Supervision of Federally Regulated Private Pension Plans
Pension Plan Fees	3,809	5,281	6,513	6,513	6,513	7,220
(3) International Assistance
Base Assessments	-	93	519	519	519	-
Cost-Recovered Services	1,378	1,610	1,507	1,507	1,507	1,582
(4) Office of the Chief Actuary
User Fees and Charges	96	145	35	35	35	21
Cost-Recovered Services	3,993	3,919	5,247	5,247	5,247	4,527
Total Respendable Revenues	86,784	79,259	89,735	89,735	89,735	90,059

 

Non-Respendable Revenues

The non-respendable revenues are all 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.

($ thousands)	Actual 2005- 2006	Actual 2006- 2007	2007-2008
			Main Estimates	Planned Revenues	Total Authorities	Actual
Regulation and Supervision of Federally Regulated Financial Institutions
Filing Penalties	805	227	450	450	450	374
Total Non-Respendable Revenues	805	227	450	450	450	374

Table 4-A: User Fee Reporting

 

Access to Information User Fees

¹ 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).
• the performance result, if provided, is not legally subject to section 5.1 of the User Fee Act regarding fee reductions for unachieved performance.

 

Table 4–B: Policy on Service Standards for External Fees

Table 4-B is a standard reporting form developed to meet the reporting requirements of the Policy. As the requirements of the User Fee Act and the Policy are very similar, much of the information contained in this table is also found in table 4-A.

A. External Fee	Service Standard2	Performance Results3	Stakeholder Consultation
Category 2 – Superintendent Non-deemed Approvals Except Those in Category 3			In March 2005, paying and non-paying stakeholders were asked to review and comment on the proposed service standards that were developed based on the analysis and research.  Comments were received over a three month period and feedback on the comments was provided to each stakeholder who took the opportunity to provide input. Stakeholders were generally supportive of the initiative, especially with regard to OSFI’s early implementation of the government’s policy.  OSFI received some queries with regard to the increased administrative costs associated with monitoring compliance with these new standards.  We noted that, as OSFI has monitored application processing time for a number of years, OSFI does not expect to incur additional costs associated with monitoring compliance with these service standards.  This expectation has proven to be the case.  OSFI continues to review the standards on an ongoing basis and, once experience with the application of the standards has developed, some modifications may be made.
Approval to maintain a representative office of a foreign bank	90% will be processed in less than 60 calendar days of receipt	98% were processed in less than 60 calendar days of receipt
Reservation of a name
Accreditation of a provincial reinsurer
Category 4 – Ministerial Approvals
Letters patent of incorporation	80% will be processed in less than 90 calendar days of receipt	99% were processed in less than 90 calendar days of receipt
Letters patent of continuance
Order permitting a foreign bank to carry on business in Canada
Order approving the insuring in Canada of risks by a foreign body corporate
Order exempting a foreign bank from certain provisions of Part XII of the Bank Act
Order approving a foreign bank or an entity associated with a foreign bank to carry out any activity described in section 522.22 of the Bank Act
Designation order
Category 5 – Precedents/ Rulings/ Interpretations
Written, precedent-setting ruling relating to the quality of capital	80% will be processed in less than 180 calendar days of receipt	93% were processed in less than 180 calendar days of receipt
Written interpretation of Acts, regulations, guidelines or rulings
Category 6 – Non-precedential Confirmations of Quality of Capital
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
Category 7 – Copies of Corporate Documents and Certificates of Confirmation
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
B. Other Information:

 

Access to Information Requests Policy on Service Standards for External Fees

A. External Fee	Service Standard2	Performance Results3	Stakeholder Consultation
Fees charged for the processing of access requests filed under the Access to Information Act (ATIA).	Response provided within 30 days following receipt of request; the response time may be extended pursuant to section 9 of the ATIA. Notice of extension to be sent within 30 days after receipt of request. The Access to Information Act provides fuller details: http://laws.justice.gc.ca/en/A-1/index.html	Statutory deadlines met 93% 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.
B. 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 User Fee Act (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.

Table 5: Response to Parliamentary Committees and External Audits

Response to Parliamentary Committees

Not applicable during 2007-2008.

Response to the Auditor General (including to the Commissioner of the Environment and Sustainable Development)

Not applicable during 2007-2008.

External Audits

During 2007-2008, the Canada Public Service Agency conducted two audits of OSFI: An “Audit of Active Offer of Communications with and Services to the Public in Both Official Languages”, which included 51 federal institutions located in the National Capital Region. The audit involved visiting OSFI’s offices and service points to verify whether: employees greet the public in both official languages during business hours; signage is in both official languages and whether written messages are of equal quality; the presence and visibility of the official languages symbol indicating the availability of communications and services in English and French; and, documentation published by the federal government and made available to the public is presented in both official languages in such a way as to respect the equal status of English and French. With the exception of the greeting, which was expressed in English only, the auditor noted that OSFI was compliant in all the other components of active offer. It was recommended that management take steps to ensure that the public is greeted in both official languages. That action has been taken. An audit on the use of Canada’s two official languages, to determine whether employees have the opportunity to be supervised in the official language of their choice. The audit targeted National Capital Region employees and was distributed within all federal government departments and agencies.  At time of writing this 2007-2008 Departmental Performance Report, OSFI had not yet received a report on the audit findings and recommendations.

Table 6-A: Internal Audits

1. Name of Internal Audit	2. Audit Type	3. Status	4. Completion Date	5. Electronic Link to Report
Supervision Sector: Financial Conglomerate Group – Life Insurance	Supervision – Risk Assessment & Interventions	In-progress	2008-2009	Will be posted on OSFI website
Corporate Services: Human Resources Planning	Corporate Services – Human Services	In-progress	2008-2009	Will be posted on OSFI website
Corporate Services – Information Technology Services Planning	Corporate Services – Information Technology	In-progress	2008-2009	Will be posted on OSFI website
Regulation: Actuarial Division (support for Supervision)	Supervision – Risk Assessment and Interventions	In-progress	2008-2009	Will be posted on OSFI website
Regulation Sector: Legislative Approvals	Regulation Sector	In-progress	2008-2009	Will be posted on OSFI website
Superintendent’s office – Management Oversight	Superintendent’s Office	In-progress	2008-2009	Will be posted on OSFI website
Supervision Sector: Financial Institutions Group- Deposit Taking Institutions	Supervision – Risk Assessment & Interventions	Completed	June 2007	Available on OSFI website
Supervision Sector: Credit Risk Department Review	Supervision – Support Group	Completed	April 2008	Available on OSFI website
Corporate Services – Staffing Process	Corporate Services – Human Services	Completed	October 2007	Available on OSFI website
Superintendent’s office- OSFI Planning Activities and Processes	Superintendent’s Office	Completed	April 2008	Available on OSFI website

Note: Actions taken as a result of completed audits are described in Section I.4.4

Table 7: Travel Policies

OSFI is a separate employer. In order to meet the requirements of its mandate, OSFI has elected to implement a travel policy specifically for OSFI. The OSFI policy is virtually identical to the Treasury Board Travel Directive, with the exception noted.

Comparison to the Treasury Board of Canada Special Travel Authorities as applied to OSFI’s executive group

OSFI takes a more restrictive approach than the TB Special Travel Authorities with respect to business class airfare for its Executive group of employees.

Comparison to the Treasury Board of Canada Travel Directive, Rates and Allowances as applied to all OSFI employees

OSFI Travel policy of the Office of the Superintendent of Financial Institutions

Authority: Under section 13 of the OSFI Act, the Superintendent is authorized to exercise the powers and perform the functions of the Treasury Board that relate to human resources management within the meaning of the Financial Administration Act, including the determination of terms and conditions of employment and the responsibility for employer and employee relations.

Coverage: The OSFI Travel Policy applies to all employees, including casual, term and indeterminate.

Principal difference(s) in policy provisions: The TB Travel Directive allows for Business Class air travel for trips exceeding 9 hours. OSFI’s Travel Policy states that non-executives may be authorized to upgrade to Business/Executive Class air travel in accordance with the following principles: When the employer requires the employee to travel on a continuous flight of five or more hours; When the employee has a physical disability that cannot be accommodated in regular economy class; When this is the lowest available fare; or In exceptional cases such as security or where the OSFI employee is traveling with an external business client who was already booked on the higher-class flight.

Principal financial implications of the differences: For 2007-2008 the estimated net cost of this difference in policy is approximately $191 thousand, based on 73 trips at an average additional cost of $2.6 thousand per trip.

OSFI effectively monitors its travel costs through communications with all employees, directed communications on policy interpretation and guidance, direct communications with managers on travel claim issues, monthly monitoring against budget, and semi-annual detailed analyses of travel expenses.