Finance committee  For defined benefit plans I think there are two kinds of issues. There's a short-term funding issue, which we talked quite a lot about. One of the other issues out there is that many sponsors believe that the current system is stacked against defined benefit pension plans and in favour of defined contribution plans.

Finance committee  Right.

Finance committee  No. OSFI administers the Pension Benefits Standards Act, the PBSA, which applies to federal employers. So that's certain groups in certain sectors, interprovincial transport, virtually all the employers in the territories, that sort of thing. We have about 10% of the action nationally, so the other 90% of private pension plans would be regulated by the provinces, the biggest provinces being Quebec, Ontario, Alberta, and B.C.

Finance committee  Yes. There are a variety of mechanisms. There are some employers that have multiple plans, where one of the plans is a provincial plan and one of the plans is regulated federally, because the employer is in different businesses. Then there's more cooperation in those kinds of cases if there are problems.

Finance committee  The legislation's regulations require regular disclosure to members in their annual disclosure statements about the solvency position of plans. We would become involved and aware through several possible channels. We do our own estimates of what we think the solvency of plans is based on the information provided previously to us.

Finance committee  Again, our focus is on safety and soundness. The issues around appropriate disclosure of products to customers are either matters for other market conduct regulators federally, like the FCAC, or the securities commissions. We have focused on income trusts, though, from a slightly different perspective, because one of the issues that's out there is whether it would be possible for a financial institution to turn part of their business into an income-trust type of structure.

Finance committee  We will focus as per our mandate on the financial institution from a prudential or safety and soundness point of view, because our mandate requires us to look at the possibility of institutions being able to compete. If an institution came to us and said, we can compete better from a cost and capital point of view because we're going to have to restructure as a holding company, for example, or restructure part of the operations and income trust structure, we'll look at that.

Finance committee  We have increased our staff in this area. One of the reasons we've set up OSFI the way we have is to ensure that we can take action when we need to, have the kinds of people we need, and pay them what we need to pay them in order to do our job. That's part of my job--to make sure that happens.

Finance committee  I told the chair that I'm willing to come on whatever basis the committee would like.

Finance committee  I look at regulatory burden from two perspectives: what are our direct costs, and what are the compliance costs we impose on institutions? Broadly speaking, I think we continue to look for and take action on both sides. Our direct costs, which we charge back to institutions, are $4 million or $5 million per large institution, which is not a large amount, quite frankly, but we continue to look for ways to keep those under control.

Finance committee  Basel II is a big initiative, and it has a major impact on the biggest financial institutions. Its impact on the small and medium-sized financial institutions is pretty tiny, because Basel II deliberately allows simpler versions for smaller and mid-size institutions, which are essentially very similar to what they're doing today.

Finance committee  There's certainly, as you said, a lot of interest in this territory. It's something that has interested a wide range of people. OSFI, for better or worse, has no mandate in this area. We have no competence and no mandate because we're a prudential regulator and not a market conduct regulator.

Finance committee  The criteria we use are set out in our governing legislation. They do not explicitly include impact on consumers. They do include the viability of the overall business, which obviously has to take some of those factors into account. In addition, the minister has a role in these approvals, assessing the impact on the overall financial system.

Finance committee  Not always. When we walk into these institutions, we're not always there to bring good news.

Finance committee  I'm not really sure what you're talking about. A couple of things in the budget are, I think, very important. The one most directly important in terms of OSFI's business is the issue of the funding relief for private pension plans. That's the biggest immediate impact on the most important and most problematic part of our business.