Cross-sectoral consultation summary report

• CAFII 

• CLHIA 

• Desjardins 

• IFB 

• CAAT 

• CADRI 

• OTLA

Overall, stakeholders were generally supportive of FSRA’s proposed SOP, particularly its focus on promoting high standards of business conduct and the rights and interests of consumers. Stakeholders continue to be supportive of the Strategic Framework, noting that the Pillar to make evidence-based and risk-based decisions balances the need for consumer protection with regulatory burden reduction, which promotes innovation. 

FSRA thanked stakeholders for taking the time to provide comments on the proposed 2024-25 SOP. 

• CAP

A stakeholder recommended that FSRA be more deliberate in designating initiatives as priorities, distinguishing long-term goals from near-term priorities, designing priorities with specific outcomes and timelines, and focusing on achieving what is most impactful within the context of possible initiatives and available resources. 

The stakeholder also provided a list of suggested techniques that FSRA could employ to become more selective in identifying and ranking priorities. 

The stakeholder argued that when FSRA has so many priorities, it effectively means FSRA has no priorities.

FSRA thanked the Consumer Advisory Panel for taking the time to provide its comments both at the September meeting and in writing.

FSRA is a multi-sectoral regulator that believes in transparency and engagement with each sector on key priorities. FSRA consults on both cross-sectoral and in-sector transformational priorities. This would not result in a greater number of priorities than may otherwise be appropriate for a regulator.

However, FSRA valued this feedback, and will take it into consideration as it enters future business planning cycles.

• CAP

• CAFII

• FAIR Canada

• CCUA

Some stakeholders agreed with the issues that FSRA had identified, particularly regarding inflation, cost-of-living, talent acquisition and retention, and the importance of Diversity, Equity, and Inclusion initiatives. Stakeholders were pleased with FSRA’s commitment to understanding environmental issues that have a significant impact on consumers.

One stakeholder noted that the environmental scan did not adequately describe the range of challenges and risks that many financial service consumers in Ontario currently face, nor the extent to which these developments have increased the vulnerability of financial service consumers. 

The stakeholder recommended that the Statement of Priorities be updated to include efforts (through new initiatives or allocating incremental resources) to anticipate and address stressful developments such as the rapid rise in interest rates, housing affordability anxieties, high inflation rates, and post pandemic job market adjustments.

FSRA appreciated the feedback on its Environmental Scan. Analyzing the environment in which it regulates is essential for FSRA to effectively prioritize risks and trends in the regulated sectors. FSRA routinely updates its environmental scan every year between when it posts the SOP for consultation and when the Annual Business Plan is finalized, so it most accurately reflects the conditions of its sectors and the realities facing consumers. FSRA believed that its Environmental Scan adequately captured the challenges facing Ontario consumers, including high inflation and cost of living.

• CAP

• Desjardins

• OMIA

Stakeholders were supportive of FSRA broadening its powers in investigations and enforcement, as well as FSRA being provided additional powers in investigations and enforcement. Stakeholders requested that FSRA continue to show balance and transparency as it relates to enforcement. They also suggested that FSRA be proactive and provide detailed communication about potential changes to the framework. 

One stakeholder recommended prioritizing efforts to enhance both the scope and effectiveness of investigations and enforcement initiatives, especially in relation to mortgage brokers, auto insurers, financial advisors, and life insurance agents. It also recommended improving investigative actions and creating opportunities for proactive supervisory oversight to further protect consumers.

FSRA will continue to increase transparency around its enforcement, as reflected in the existing priority, and will do so in a measured way that is fair to the subjects of investigation and enforcement.

• CAFII

One stakeholder supported the development of FSRA using monies it collects from enforcement actions to help consumers improve financial literacy and awareness, including getting an understanding of market trends in the province.

FSRA is committed to strengthening its consumer research function and improving financial literacy. As per its Guidance on use of proceeds from enforcement, FSRA will consider partnership with stakeholders in this area.

• CAP

• CAFII

• OMIA

Stakeholders stressed the importance of FSRA executing forward looking initiatives to support vulnerable consumers, such as targeted outreach to vulnerable communities to increase awareness of the services available to them, addressing the risks they face, and advocating for ways to improve plain language communication opportunities.

FSRA appreciated the support for its planned activities related to identifying and acting on opportunities to better protect vulnerable consumers. FSRA will engage with stakeholders on the specific topics raised in submissions (e.g., increasing awareness of FSRA in vulnerable communities, plain language communication).

• CAFII

• CCUA

• CAAT

• OTLA

Stakeholders expressed their support for strengthening the consumer focus. They encouraged FSRA to conduct research and analysis to respond to trends that impact consumers, and to continue to consult with sectors to provide advance understanding and awareness of FSRA initiatives.

FSRA appreciated stakeholder support for strengthening the consumer focus. FSRA will develop its consumer research function further in the coming years.

• CAP

• John Hamilton

One stakeholder encouraged FSRA to keep its expenses low across all regulated sectors.

One stakeholder recommended that FSRA provide more detail and transparency on its spending and revenues. It would like to see alternative representations of the fiscal plan that are more meaningful and relevant to consumers. The stakeholder suggested using a matrix-based display to present expenditures by activities, which would make it easier to identify opportunities for collaborating on initiatives, thereby introducing potential cost efficiencies across sectors.  

FSRA continued to be mindful of its expenses when striving to achieve its regulatory objects. 

FSRA remains committed to providing transparency in the SOP, Annual Business Plan and the Annual Report and sought to ensure that sufficient financial detail is provided to enable stakeholders to adequately assess FSRA’s priorities and related cost/benefit(s). FSRA lacked reliable information to fully present expenditures by activities, either historically or in forward-looking budget estimates.

• CAFII 

• FAIR Canada 

• OMIA 

• CCUA 

• IFB 

• CAAT 

• CADRI 

• OTLA 

Stakeholders were supportive of innovation efforts, especially with the continued availability of a regulatory sandbox and Test and Learning Environment (TLE). They also encouraged FSRA to continue to work with the regulated sectors as FSRA scales the TLE. One stakeholder would like to see more educational workshops around the TLE to further enhance its understanding of the opportunities, responsibilities, and costs of entering a TLE. They would also like FSRA to play a key role in ensuring that innovation trends and developments at the federal level (such as open banking) are understood.  

One stakeholder noted that FSRA’s brand as a “regulator that supports and enables innovations” should include promoting innovations that make a difference in the lives of consumers, and that provide consumers with more control in managing their financial well-being. The stakeholder believes that enabling innovation should be balanced with a focus on consumer outcomes and should not come at the expense of consumer rights or exposure to consumer harm. The stakeholder would like to see regulators dedicate more effort to solving issues impacting consumers, such as by finding ways to reduce the time it takes to transfer accounts from one financial institution to another, or by improving a firm’s internal complaint handling process.

FSRA continued to strengthen awareness of the TLE and communicate the value and criteria for the TLE. All TLE applicants were required to identify the consumer benefits of the innovation being tested and ensure that all approved TLE’s have tailored consumer protection guardrails.  

FSRA must ensure that any innovation being facilitated aligns with its core responsibility as a regulator to protect consumers and members. The Innovation Framework outlined seven guiding principles to ensure consumer protection, a five-step process for assessing risk, and affirmed FSRA’s commitment to ‘responsible innovation’.

• CAFII

• OMIA

• CCUA

• IFB

• CAAT

• OTLA

Stakeholders were supportive of efforts to modernize systems and processes. Stakeholders noted that FSRA should ensure that the collected data is comparable across institutions to be analyzed effectively, and that it should report on the data and research in a meaningful and insightful way. FSRA is encouraged to be more transparent, for example through roadmaps and timeline updates around system improvements, so that stakeholders can understand how a project is being managed, expectations for changes to sectors, budgets, and costs.

One stakeholder encouraged FSRA to collect data through existing means, such as the Annual Statement on Market Conduct, to avoid duplication or repetitive data collection from other regulators. 

One stakeholder noted that FSRA should consider the principle of proportionality when considering the outcome of “greater access to data and analytics tools across all sectors”. It believed that organizations should have discretion to make their own decisions as to the data they collect, above and beyond that which is part of a mandatory and well-established data reporting protocol.

One stakeholder was supportive of FSRA’s ability to implement data and analytic tools to improve FSRA’s regulatory oversight and increase administrative efficiencies.

FSRA aimed to collect information in a way that reduces burden for its stakeholders while balancing the need for accurate and relevant data. FSRA will continue to find ways to operate more transparently and efficiently. 

FSRA operated using the principles of proportionality when supervising its regulated entities, including when collecting data. As a principles-based regulator, FSRA can more effectively supervise its regulated entities of different sizes using this approach.

• CAFII

To clarify and prioritize that a harmonized approach continues to be prioritized, the stakeholder encouraged FSRA to ensure that references to the fair treatment of consumers in the Statement of Priorities is consistent with the Canadian Council of Insurance Regulators (CCIR)/Canadian Insurance Services Regulatory Organizations (CISRO) Guidance: Conduct of Insurance and Fair Treatment of Customers.

FSRA recognized the importance of national harmonization with respect to the fair treatment of customers and will continue to cooperate and collaborate with other regulators through the CCIR and CISRO.

• CAFII

• CAP

One stakeholder encouraged the Ministry to provide FSRA with broader enforcement authority to execute investigation and enforcement activities effectively. 

One stakeholder was concerned with the reduction of the FSRA rule consultation minimum period to 60 days, suggesting it makes it harder for industry to comment. It suggests FSRA should advise on consultations as early as possible to accommodate.

FSRA will notify the Ministry of Finance of the comments regarding proposed or potential legislative amendments. 

Meaningful engagement and collaboration with stakeholders and the public are important to FSRA’s success as a principles-based financial services regulator. The minimum consultation period will not become the standard without careful consideration. 

FSRA recognized challenges associated with reviewing and obtaining industry consensus about proposed changes to FSRA Rules but noted the importance of promptly implementing consumer protections. FSRA will continue to work with industry and other stakeholders to obtain their input in advance of any changes to its regulatory framework.