A new report from the Insurance Bureau of Canada (IBC) reveals that regulatory compliance costs within the country’s property and casualty (P&C) insurance industry have risen by 81% since 2022. The increase far exceeds both inflation and the sector’s revenue growth, highlighting growing financial and operational pressures amid Canada’s wider productivity concerns.
The 2024 Regulatory Compliance Cost Survey, which compiled responses from 24 IBC member companies representing 61% of the national P&C market, examined costs over the 2022–2024 period. According to the findings, total compliance expenses reached $753 million in 2024, up from $416 million in 2022. Respondents indicated expectations of continued cost escalation into 2025.
Internal labour constituted nearly three-quarters of total compliance spending, reflecting a 26% increase in full-time employees assigned to manage regulatory obligations. Insurers devoted significant resources to both federal and provincial compliance requirements, with 40% of total costs linked to meeting the standards of the Office of the Superintendent of Financial Institutions (OSFI).
“As Canada grapples with lagging productivity and seeks ways to strengthen its economy, taking a serious look at our fragmented and increasingly complex regulatory system makes good sense,” said Celyeste Power, president and CEO of IBC.
“While Canada’s regulatory system is increasing in cost and complexity, other countries are streamlining to drive productivity and growth. If Canada is serious about increasing its competitiveness globally, we need a more modern approach to regulation that protects consumers while enabling innovation and growth.”
The IBC report aligns with recent research from the C.D. Howe Institute. Its study, Pruning the Rulebook: Canada’s Financial Regulatory Scorecard, Year Two, observed that compliance-related labour costs across the financial sector rose from 16% in 2019 to 22% in 2024. The report warned that Canada’s regulatory priorities emphasize protection and stability over innovation and competition, diverging from trends in other advanced economies.
According to Statistics Canada, the number of federal regulatory requirements grew by 37% between 2006 and 2021, a development estimated to have reduced GDP growth by 1.7% and employment growth by 1.3%. The World Economic Forum currently ranks Canada 38th globally for regulatory burden and 54th for internal labour mobility.
“IBC recognizes that regulation is essential to maintaining market integrity and protecting consumers,” said Power. “But it’s a matter of balance. The harsh irony is that the effort to protect consumers can end up having the opposite effect.”
The report’s release comes as the federal government prepares its next budget, which pledges to “deliver a clear plan to build Canada into the strongest economy in the G7.” IBC stated that easing regulatory strain could contribute significantly to achieving that objective.
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