Diversity Disclosure for Trust and Loan Companies

Summary#

The government published proposed Diversity Information Disclosure (Trust and Loan Companies) Regulations on February 15, 2025. If adopted, the rules would require distributing trust and loan companies to share standard information with their owners about who sits on their boards and in senior management, and about policies and targets for diversity.

What it does#

• Applies to distributing companies under the Trust and Loan Companies Act and sets out the information they must disclose to owners at the time the annual meeting notice is sent.
• Requires reporting on four “designated groups” as defined in the Employment Equity Act: women, Indigenous peoples, persons with disabilities, and members of visible minorities. It also requires Indigenous data to be split into First Nations, Inuit, and Métis.
• Requires companies to say whether they have:
  • term limits or other board renewal mechanisms and to describe them (or explain why not);
  • a written policy for identifying and nominating candidates from designated groups, with a short summary, implementation measures, progress reports, and whether the policy’s effectiveness is measured;
  • whether representation of designated groups is considered when nominating directors and when appointing senior managers (and explain how or why not);
  • targets for representation on the board and in senior management, and the annual and cumulative progress toward those targets (or reasons for not having targets).
• Requires a table showing the number and proportion (percentage) of directors and senior managers from each designated group, including for any “major subsidiary” (a subsidiary that accounts for 30% or more of consolidated assets or revenue).
• Defines “members of senior management” to include roles such as the chair, vice-chair, president, chief executive officer, chief financial officer, vice-presidents in charge of principal business units, and officers who report directly to the board, CEO, or COO.
• The proposed rules include a standard form (a table) for reporting numbers and percentages.
• Enforcement and oversight would be under the Office of the Superintendent of Financial Institutions (OSFI) as part of the existing Financial Institutions statutes.
• This is a proposal (not final). There is a public comment period of 30 days from the notice publication.

Who's affected#

• Distributing trust and loan companies (the government estimates about 16 FRFIs would be directly affected).
• Shareholders and investors of those distributing companies, who would receive the information.
• Boards of directors and senior managers at those institutions, since their composition and policies are what will be reported.
• Major subsidiaries of those companies when they meet the 30% asset or revenue threshold.
• The Department of Finance and OSFI because they are involved in creating and overseeing the rules.
• Non-distributing trust and loan companies would generally not be covered by these proposed rules.

Why it matters#

• Investors would get a standard, comparable set of diversity information to help them assess how institutions are managing diversity at the board and senior level.
• The disclosure could make it easier to track progress over time and encourage companies to adopt policies or targets to increase representation.
• The government estimates the reporting work will be small: a total present-value cost of $56,905 (discounted at 7%) from 2025–2034, or $8,102 on an annualized basis. Initial reporting is estimated to take about 8 hours from a senior manager and 16 hours from a finance professional; in later years about 2 hours and 4 hours respectively.
• Some groups welcomed disaggregated Indigenous reporting (separate First Nations, Inuit, Métis data). The proposal also notes concerns raised in consultations about privacy, self-identification, and whether public disclosure could be harder for foreign-headquartered institutions that lack local candidate pools.
• Because this is a proposed regulation, the rules are not yet in force. They would come into force when the related part of the Budget Implementation Act, 2024 is brought into force, or when the regulations are registered if that happens later.