OTTAWA — Canada’s federal banking regulator says it’s lowering its domestic stability buffer to three per cent from 3.5 per cent, a move it says will give the country’s six largest banks greater flexibility to deploy capital.
The Office of the Superintendent of Financial Institutions said it’s the first change to the domestic stability buffer since June 2023 and takes effect Friday.
The regulator also narrowed the potential range of the buffer to between zero and three per cent compared with an earlier range of zero to four per cent.
“By lowering both the level and top end of the range of the domestic stability buffer, OSFI will enable the banking sector to deploy its excess capital in support of Canada’s economic adaptation to new opportunities,” Peter Routledge, superintendent of financial institutions, said in a news release.
The buffer is part of the amount of money Canada’s big banks must keep on hand in case of economic shock. It applies to Canada’s six largest, or systemically important, banks. Lowering the buffer gives the banks more room to lend, potentially helping the economy.
Routledge said OSFI anticipates Canada’s largest lenders will use the money to invest in Canada’s economy through a period of “structural change.”
The buffer is reviewed and set every June and December, but can be changed at other times if needed.
In December of 2025, the regulator kept the domestic stability buffer unchanged at 3.5 per cent. Routledge said at the time that the economy was faring “better than we had feared,” but that it was prepared to lower the buffer if economic conditions worsened to give banks more room to lend.
The move by OSFI to lower the buffer comes as Prime Minister Mark Carney looks to provide a spark to Canada’s economy.
This report by The Canadian Press was first published June 19, 2026.
