CDIC’s Funding Framework

Canadians can be confident that the Canada Deposit Insurance Corporation (CDIC) will protect their insured deposits held by CDIC member institutions. This protection includes CDIC having in place a strong funding framework to support the timely resolution of a member institution in the rare event it should fail.

CDIC’s funding framework includes a deposit protection fund (ex ante fund), and deposit insurance premiums paid by member institutions according to CDIC’s Differential Premiums System.

CDIC’s mandate in respect of resolution, and the member institution risk and operating environment, have changed significantly since the current funding framework was last reviewed.

Strategic Review and Consultation

In 2022, CDIC announced revisions to its deposit protection fund (ex ante fund) target level and launched a public consultation paper seeking input on proposed changes to its Differential Premiums System (DPS). In the consultation paper, CDIC sought feedback on a number of proposed changes to its ratings system used to differentiate member institutions to achieve key policy objectives. Proposed changes include:  

• Raising the number of premium rate categories to five from four;
• Increasing the frequency of differential premium assessments; and
• Enhancing metrics related to financial and regulatory criteria used by CDIC to complete assessments, including a greater emphasis on resolvability.

Here is a summary of the feedback we received.

Going forward, CDIC will continue to anticipate and respond to developments in the financial sector to ensure that the deposit insurance protection and resolution frameworks remain fit for purpose.  We will continue to work with our member institutions to achieve that end.

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