The Office of the Superintendent of Financial Institutions issued a letter to all federally regulated financial institutions on 11 September 2025, setting out changes to its approach to Administrative Monetary Penalties. The revised framework lowers the regulator's stated tolerance for contraventions of federal financial legislation, introduces earlier imposition of penalties including for infractions previously treated as minor, and adds new indicators for evaluating the criteria used to determine the size of individual penalties assessed against regulated institutions and individuals.

The new approach applies to violations occurring after 11 September 2025. For violations that took place on or before that date, OSFI confirmed a transitional arrangement: those matters that are identified on or before 31 December 2026 will be evaluated under the older framework.

LOWER TOLERANCE AND FASTER ENFORCEMENT

Under the revised approach, OSFI said penalties will be issued when it determines lower levels of negligence and harm. Administrative Monetary Penalties will be applied more promptly and across a wider portion of the severity spectrum than was previously the case. OSFI also added new indicators for assessing the penalty criteria and a revised scaling factor for small and mid-sized institutions.

The maximum Administrative Monetary Penalty available under federal legislation is set at CAD 100,000 for individuals found to be in contravention and CAD 500,000 for federally regulated financial institutions in respect of the most serious category of violation. All AMPs collected by OSFI are remitted directly to the federal Consolidated Revenue Fund rather than being retained by the regulator for its own operational purposes.

COMMUNICATION TO INSTITUTIONS

OSFI communicated the change through a letter sent to all federally regulated financial institutions and supported by background material published on its official website. The regulator asked institutions to share the notice with their management and boards of directors, directed questions to its Legislative Affairs Division, and said more detailed guidance on the revised methodology would follow later in 2025.