BCFSA CEO Remarks to Canadian Credit Union Association

• Industry Communications

23 June 2025

Speech | Tolga Yalkin – Virtual, June 23, 2025

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Spanning the Divide: Building a Bridge for Extra-Provincial Credit Union Operations

Introduction

Canada’s credit union system is poised at a pivotal moment. Interest is rising in serving members across provincial boundaries, reflecting how financial lives increasingly transcend borders. Should a framework agreement among provinces materialize, it would signal the laying of a foundation—a first span in a bridge linking jurisdictions.

Such a step would not only promote coherence in regulatory oversight but also contribute to a more diverse and dynamic financial services landscape. By enabling growth in a risk-appropriate way, it can expand choice, foster responsible innovation, and increase financial inclusion for Canadians—while aligning with broader national efforts to reduce internal barriers to trade and economic activity.

These remarks assume such an agreement as a reference point. They explore how regulators might give it meaningful effect—recognizing that while the foundations may be agreed, the work of construction lies ahead. As with any bridge, early trust and sound design are essential—but it is the way the spans are laid that determines what traffic the bridge can bear.

One Bridge, Many Spans: Not All Activities Carry the Same Risk

Before regulators can begin constructing the framework’s operational architecture, we must understand what exactly the structure is being asked to support. The activities permitted under any framework agreement will vary in complexity—and so too will the risks they introduce.

Some activities—like offering digital services or onboarding new members remotely—pose relatively contained and well-understood risks. Others—like cross-provincial lending or physical branch operations—carry more complex prudential and operational implications. And still others—such as mergers across jurisdictions—require careful consideration of structural and governance considerations.

The point is not to rank these activities from safe to unsafe. It is to acknowledge that each carries a different weight, profile, and point of impact. While the nature of risk may be similar—credit, liquidity, operational, conduct—the impact may be felt in different parts of the system: within the institution, the broader deposit insurance framework, or in the consumer protection regimes enforced by host jurisdictions. And these impacts may differ not just in magnitude, but in form—operational, financial, reputational, or systemic.

This diversity demands a tailored response. Just as no engineer would design a bridge with identical supports for every span, regulators should not default to uniformity in how they approach alignment.

Some spans will require only basic coordination—an agreement to share information and remain alert to emerging risks. Others may call for deeper convergence of regulatory expectations. And in select cases, particularly those involving public-facing commitments like deposit insurance or failure resolution, progressive standardization may be the only responsible course.

In short, a practical and durable implementation plan must begin with a clear-eyed view of what activities are in scope—and the risks they carry. Only then can we match the structure to the stresses it must withstand.

Building the Bridge: Early Steps and Practical Priorities

Once a framework agreement is established, the focus shifts from principles to practice. The task before regulators is not just to oversee extraprovincial operations—but to actively shape the conditions under which they succeed.

That begins with a handful of immediate, concrete actions:

• Supervisory Coordination Mechanisms: Establishing supervisory colleges or standing coordination teams for institutions with significant extraprovincial operations. These structures will enable proactive dialogue, joint planning, and coordinated responses to emerging risks.
• Templates and Protocols: Developing common templates for reporting, notification, and approval processes—particularly for business authorizations, extraprovincial branch expansion, and material business changes. These tools reduce duplication and increase regulatory predictability.
• Prioritizing Areas for Alignment: Identifying early candidates for convergence or progressive standardization, such as capital and liquidity treatment, deposit insurance disclosure, or governance requirements. These foundational elements offer the greatest stability benefits.
• Ongoing Joint Reviews: Conducting joint supervisory reviews or risk assessments for extraprovincial credit unions to develop shared views and reinforce alignment in practice.
• Communication with the System: Engaging credit unions transparently about expectations, implementation timelines, and supervisory priorities—to ensure clarity, manage transition risks, and encourage prudent growth.

These early efforts are not exhaustive—but they are foundational. They create the essential supports of the bridge: the routines, relationships, and expectations that give meaning to the framework on paper.

Done well, they allow for meaningful extraprovincial activity to begin—anchored in shared oversight, reinforced over time through collaboration, and strengthened as system maturity deepens.

Sustaining the Effort: Qualities That Make the Bridge Endure

Bridges are not only defined by their design—but by the care with which they are built and maintained. The same is true here. Success will rest not just on reciprocal agreements or harmonized rules, but on the calibre of the people implementing them.

What’s required is more than technical skill. It will take:

• Discipline in execution — ensuring that oversight remains risk-based, proportionate, and consistent across jurisdictions.

• Humility — recognizing that no regulator has a monopoly on good ideas, and that shared supervision means shared learning.

• Transparency — so that institutions, deposit insurers, and the public can understand how oversight is working in practice.

• Curiosity — to adapt as financial services evolve, and to revisit assumptions as new issues emerge.

• Tenacity — to keep showing up, even when coordination is complex, and alignment takes time.

When building a bridge, it is not only the materials that matter, but the skill, attentiveness, and steady hand of the craftsperson. In this case, regulators are the builders. The integrity of the bridge depends not only on how it is laid — but on how we steward it, together, over time.

Conclusion: The Bridge Is Ours to Build

There is nothing abstract about the work ahead. It is concrete, deliberate, and ultimately rewarding. The foundations may be established, but the structure’s strength—its capacity to carry real traffic—will depend on how we build.

Not all questions will be answered up front. Not all alignment will come at once. But that is not a flaw—it is a feature of meaningful progress. Trust can carry weight in the early spans, provided it is reinforced with discipline, care, and openness to iteration. Over time, shared oversight will take on more structured forms, and certain areas will call for deeper alignment. That arc—from coordination to convergence to progressive standardization—is not a shortcut, but a path.

And like any well-built bridge, what we construct here must not only serve today’s needs—it must remain open to tomorrow’s. The real accomplishment will not be a perfectly symmetrical framework, but a flexible one: grounded in principle, responsive to risk, and capable of holding up as new weight is placed upon it.

In the end, the value of this bridge will not lie in its symbolism—but in its use.

In the credit unions it allows to serve their members more broadly.

In the protection it continues to offer depositors across jurisdictions.

And in the way it shows that even across different regulatory landscapes, we can meet at the centre—not by giving up what makes us distinct, but by building on what we share.