Regulator’s first 2026 release tightened its lens on credit, governance and liquidity
Canada’s banking regulator puts a stronger frame around how lenders take risk in early 2026, rolling out fresh guidance on liquidity while opening lengthy consultations on credit risk management and board‑level accountability.
But it's leaving the mortgage stress test unchanged, keeping that qualification rule at its current level of 5.25% or two points above a borrower's contract rate, whichever is higher.
Rather than add new line‑item rules for mortgage underwriting, the Office of the Superintendent of Financial Institutions (OSFI) said it plans to pull existing expectations for mortgage, commercial real estate and corporate credit into one principles‑based guideline, to be consulted on over six months.
The aim, it said, is to cut complexity and compliance costs while staying aligned with international practice.
“OSFI's approach to regulatory oversight is principles‑based, proportionate, and focused on the risks that matter most,” superintendent Peter Routledge said.
“Through this release, OSFI aims to improve prudential clarity without over‑burdening institutions or compromising the resilience of Canada's financial system.”
Credit risk and board accountability under review
The planned Credit Risk Management Guideline would consolidate risk expectations across portfolios and, OSFI argued, improve supervisory efficiency.
At the same time, a nine‑month consultation on governance and accountability for boards and senior executives would examine how weak oversight could allow issues to bypass internal warning systems and emerge as systemic problems.
OSFI signalled in earlier B‑20 consultations that lender‑level tools such as loan‑to‑income (LTI) and debt‑service constraints are likely to play a bigger role in mortgage risk control, after pandemic‑era borrowing pushed household leverage higher.
In 2023, it stopped short of imposing hard new debt‑service caps but left the door open to portfolio‑based measures.
Liquidity rules refined as LTI limits stay
On liquidity, the finalized 2026 Liquidity Adequacy Requirements Guideline clarified how deposits would be classified and is intended to give banks more certainty for balance‑sheet planning.
OSFI also confirmed that LTI caps introduced on uninsured mortgages would remain in place after a pilot. It concluded that such caps “lessen the build‑up of highly leveraged residential mortgage borrowers, which in turn reduces systemic risk.”
Earlier, Routledge framed LTI as a potential alternative or complement to the minimum qualifying rate – a shift that would move more of the burden for prudence to lenders’ books rather than individual borrowers.
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