CAPL represents and supports participants in Canada’s private-lending sector, including private lenders, mortgage brokerages, mortgage brokers, administrators, service providers, and other stakeholders involved in originating, arranging, funding, administering, and servicing private mortgage loans. CAPL members serve borrowers and property markets throughout British Columbia, including borrowers whose financing needs may not be met through traditional institutional lending channels.

CAPL supports a fee-review approach that is transparent, predictable, proportionate, and based on efficient cost recovery. CAPL also recognizes BCFSA’s need to respond to genuine, material changes in its regulatory responsibilities, the mortgage market, and the costs of regulation. However, mortgage-services fees can directly affect small brokerages, individual licensees, private lenders, and the availability and cost of credit. The framework should therefore contain clear safeguards concerning review triggers, cost allocation, operational efficiency, performance accountability, consultation, and implementation.

1. Support for the Proposed 2026–2029 Mortgage-Services Approach

CAPL supports the proposal that mortgage services not be subject to annual cost-based fee reviews during 2026–2029. The discussion paper states that the 2026 comprehensive fee review considered mortgage-services-specific cost-recovery issues and included forward-looking inflation assumptions.

This approach should provide useful predictability for mortgage-market participants. Licensing and regulatory fees are meaningful fixed costs, particularly for individual mortgage brokers, small brokerages, newer firms, and specialized private-lending businesses. Avoiding routine annual adjustments can reduce administrative burden and improve budgeting certainty.

BCFSA should expressly confirm that ordinary inflation, normal changes in mortgage-market activity, and routine operating-cost fluctuations will not, without more, constitute a material change warranting an early comprehensive fee review during the 2026–2029 period.

2. Clear and Objective Triggers for an Early Comprehensive Review

CAPL recognizes that BCFSA may need to bring forward a comprehensive mortgage-services fee review where material changes occur. However, the discussion paper refers broadly to changes in regulatory responsibilities, market conditions, costs, revenues, or the operation of the fee model.

To preserve the predictability intended by the proposed framework, BCFSA should publish objective guidance on the circumstances that may justify an early comprehensive review. That guidance should:

1. distinguish exceptional, sustained, or sector-specific developments from ordinary market movement and annual cost variation;
2. identify the financial, operational, market, and regulatory indicators BCFSA will assess;
3. describe the degree or duration of change BCFSA will treat as material;
4. require BCFSA to publish the reasons, supporting evidence, and preliminary financial analysis for an early review; and
5. confirm that mortgage-services stakeholders will be consulted before BCFSA develops a substantive fee-change or fee-model proposal.

An early review should be exceptional rather than a substitute for annual budget management or for the annual review process that BCFSA proposes not to apply to mortgage services during 2026–2029.

3. Transparent Mortgage-Services Cost Recovery

CAPL supports cost recovery when fees are based on reasonable, necessary, efficiently incurred, and properly allocated regulatory costs. The existence or growth of internal expenditure should not, by itself, justify an increase in fees charged to mortgage-services participants.

Before recommending a material mortgage-services fee change or fee-model amendment, BCFSA should publish sufficient sector-specific information to allow stakeholders to understand the relationship between fees, costs, and regulatory activity. That disclosure should include:

1. total mortgage-services fee revenue;
2. direct mortgage-services regulatory costs;
3. allocated shared costs and corporate overhead;
4. any material accumulated surplus or shortfall attributable to mortgage services;
5. the assumptions used to project future mortgage-services costs and revenues;
6. the principal cost drivers for the mortgage-services sector; and
7. the anticipated financial impact of the proposed change by licence category and firm size.

BCFSA should present this information in an accessible form and use a consistent methodology from one review period to the next. If BCFSA changes its cost-allocation methodology, it should explain the change, its rationale, and its effect on the fees paid by mortgage-services participants.

4. Transparent Allocation of Corporate Overhead and Shared Costs

CAPL requests particular transparency concerning the allocation of centralized BCFSA costs across its regulated sectors. Mortgage brokers, brokerages, and private lenders should not bear costs properly attributable to other industries or to activities that do not provide a demonstrable benefit to the mortgage-services sector.

BCFSA should disclose the methodology used to allocate corporate and shared-service overhead, including costs associated with:

1. executive leadership and governance;
2. finance, procurement, human resources, legal, communications, and corporate administration;
3. technology systems, cybersecurity, data management, and digital transformation initiatives;
4. premises, facilities, and general operating expenses;
5. policy development, external relations, and public education;
6. complaints, investigations, enforcement, and litigation support; and
7. other centralized functions or major projects.

For each material shared-cost category, BCFSA should explain the allocation basis, such as actual usage, headcount, direct regulatory activity, risk, revenue, licence population, or another demonstrably appropriate measure. BCFSA should also explain why that basis is proportionate for mortgage services.

Where BCFSA proposes to recover a material increase in shared services, technology, staffing, or other overhead from mortgage-services participants, it should demonstrate that the expenditure:

1. is necessary for BCFSA’s mortgage-services mandate or provides a demonstrable benefit to the mortgage-services sector;
2. has been assessed against reasonable alternatives and cost-efficiency measures;
3. is allocated to mortgage services on a proportionate basis;
4. is supported by an implementation plan, budget, expected benefits, and measurable success criteria; and
5. will be subject to post-implementation reporting on actual costs, realized benefits, and any material variance from the original proposal.

5. Regulatory Performance Measures and Benchmarks

A cost-recovery framework should be connected not only to the amount BCFSA spends, but also to the quality, timeliness, and effectiveness of the regulatory services and outcomes delivered. CAPL recommends that BCFSA establish, publish, and report annually against meaningful mortgage-services performance measures.

Those measures should be specific, measurable, and relevant to services and regulatory activity funded through mortgage-services fees. They should include, where applicable:

1. licence-application and renewal processing times;
2. service standards for responding to stakeholder and licensee inquiries;
3. complaint acknowledgement, triage, investigation, and resolution timelines;
4. examination and supervisory-review activity, including completion times and relevant findings;
5. investigation and enforcement timelines and outcomes;
6. the volume, type, and disposition of complaints and enforcement matters;
7. stakeholder satisfaction or service-quality indicators;
8. material regulatory initiatives completed, delayed, or discontinued; and
9. actual performance against BCFSA’s approved annual plan, budget, and stated service commitments.

BCFSA should also benchmark its performance and cost structure against:

1. its own historical performance;
2. its approved plans, budgets, and performance targets;
3. comparable Canadian financial-services regulators, where comparable information is available; and
4. other appropriate public-sector regulatory organizations performing similar licensing, supervisory, complaints, or enforcement functions.

The purpose of benchmarking is not to require identical structures across regulators. It is to provide a practical basis to evaluate whether regulatory services are being delivered efficiently, whether costs are increasing at a reasonable rate, and whether mortgage-services participants are receiving demonstrable value for the fees they pay.

Where BCFSA does not meet a material performance target or experiences a material cost overrun, it should explain the reason, identify corrective action, and report on progress in the following reporting period.

6. Independent Review of Cost Allocation and Efficiency

CAPL recommends that BCFSA periodically obtain an independent external review of:

1. its cost-allocation methodology among regulated sectors;
2. the efficiency and necessity of material corporate overhead and shared-service expenditures; and
3. whether the mortgage-services fee model reasonably aligns with the cost drivers of mortgage-services regulation.

The independent reviewer’s findings, recommendations, and BCFSA’s response should be made public, subject only to necessary protection for legally privileged, personal, confidential, or security-sensitive information.

An external review would strengthen stakeholder confidence that fee levels reflect reasonable regulatory costs and that BCFSA has a process for identifying efficiencies before seeking additional revenue from regulated persons.

7. Proportionate Treatment of Small Firms and Individual Licensees

The mortgage-services sector contains firms and licensees with substantially different sizes, business models, transaction volumes, risk profiles, and revenue capacity. A fee structure that is administratively simple may still be disproportionately burdensome for individual mortgage brokers, new entrants, small brokerages, and lower-volume market participants.

Each comprehensive mortgage-services fee review should include an impact analysis showing the expected effects of a proposal on:

1. individual mortgage brokers;
2. small brokerages;
3. mid-sized and larger brokerages;
4. new entrants;
5. firms operating in regional or specialized markets; and
6. firms with different activities, including mortgage origination, referral, private lending, administration, and servicing.

If BCFSA considers changes to flat fees, minimum fees, caps, thresholds, or activity-based fees, it should explain why the chosen approach reasonably reflects actual regulatory cost drivers. For material changes, BCFSA should consider phased implementation, reasonable transition periods, and appropriate thresholds where these measures would reduce undue burden without compromising the integrity of the cost-recovery model.

8. Fee Models Should Reflect Demonstrable Regulatory Cost Drivers

The discussion paper recognizes that comprehensive reviews may recommend changes to fee rates, caps, thresholds, or the underlying fee model. CAPL considers the fee-model question to be especially important for mortgage services.

Any revised fee model should be supported by evidence that the fee base has a reasonable connection to the activities, risk, complexity, or supervisory effort that drive BCFSA’s regulatory costs. Depending on the proposal, relevant factors may include licence category, the nature of regulated activity, business scale, transaction or loan volume, assets administered, consumer-facing activity, complaint patterns, compliance history, and other factors demonstrably connected to regulatory work.

CAPL does not recommend adopting a particular fee base in advance of BCFSA’s analysis. CAPL asks instead that BCFSA clearly demonstrate the connection between the selected methodology and the reasonable cost of regulating the affected mortgage-services activity. A model that reallocates costs among licence holders without that connection may create unintended market distortions or discourage appropriate market participation.

9. Meaningful Consultation Before Recommendations Are Sent to Government

CAPL welcomes the discussion paper’s commitment to engagement before proposed fee changes are recommended to government. To ensure that engagement is meaningful, BCFSA should provide stakeholders with the proposed fee schedule or revised fee model and the supporting analysis before its recommendation is finalized.

Before submitting a material mortgage-services fee proposal to government, BCFSA should publish:

1. the proposed fee schedule, fee-model amendment, or other proposed change;
2. the underlying sector-specific cost-recovery analysis;
3. relevant revenue, surplus, and shortfall information;
4. the shared-cost and overhead allocation methodology;
5. the performance data and benchmarking analysis supporting the proposal;
6. an impact assessment by licence category, firm size, and business model;
7. implementation timing and transitional arrangements; and
8. a summary of material stakeholder feedback and BCFSA’s response to that feedback.

CAPL recommends a consultation period of not less than 60 days for material mortgage-services fee or fee-model changes, with a longer period where the proposal is complex or could materially affect business models, market access, or the cost of credit.

10. Predictable Implementation and Treatment of Surpluses and Shortfalls

If a fee change is approved, mortgage-services participants should receive sufficient advance notice to budget and operationalize the change. Where practicable, BCFSA should align implementation with licensing or renewal cycles rather than introducing material changes during a period in which firms have already planned their annual costs.

BCFSA should also address material mortgage-services surpluses and shortfalls transparently. If a material surplus exists, BCFSA should explain whether it will be retained for identified future regulatory needs, applied as a credit or offset against future fees, or otherwise addressed through the next fee-setting process. If BCFSA relies on a shortfall to support a fee increase, it should explain the cause of the shortfall, the cost-control measures taken, and why recovery from mortgage-services participants is appropriate.

11. Ongoing Reporting During the 2026–2029 Period

Although CAPL supports the proposed absence of annual cost-based fee reviews for mortgage services during 2026–2029, BCFSA should continue to provide annual high-level reporting on the operation of the mortgage-services fee model.

That reporting should include mortgage-services fee revenue, direct and allocated costs, material variances from budget, significant surpluses or shortfalls, relevant performance outcomes, and any indication that BCFSA is considering an early comprehensive review. This reporting would not create an annual fee review; it would give stakeholders visibility into whether the assumptions supporting the 2026 comprehensive review remain appropriate.

12. Confidentiality and Treatment of Consultation Submissions

CAPL notes that non-anonymized submissions may be shared with the British Columbia Ministry of Finance and that BCFSA intends to publish an unattributed summary of feedback. BCFSA should clearly explain:

1. how it will handle information identified as confidential or commercially sensitive;
2. whether an organization may request that its identity not be disclosed publicly;
3. the circumstances in which BCFSA may disclose a submission under access-to-information obligations; and
4. whether BCFSA will provide notice before a discretionary disclosure of confidential information, where legally permitted.

Clear submission-handling practices will encourage candid, evidence-based participation from mortgage-market stakeholders.

Conclusion

CAPL supports a fee-review framework that promotes predictable, proportionate, and transparent cost recovery while preserving BCFSA’s ability to respond to genuine and material regulatory developments.

For mortgage services, CAPL supports the proposed 2026–2029 exclusion from annual cost-based reviews. To make that approach effective and credible, BCFSA should adopt objective early-review triggers; disclose mortgage-services-specific costs, revenues, and cost-allocation methods; demonstrate efficient use of resources; publish meaningful performance measures and benchmarks; obtain periodic independent review of material overhead and allocation practices; assess impacts on smaller participants; and conduct meaningful consultation before submitting fee proposals to government.

These measures would help ensure that mortgage-services fees reflect demonstrated regulatory need, efficient administration, measurable regulatory performance, and a fair allocation of cost among those who are required to pay them.

Sincerely, Samantha Gale, CAPL CEO