On July 9, 2026, CAFII hosted a webinar titled A Conversation on the State of Canada’s Financial Landscape Amidst an Increasingly Complex World: A CAFII Virtual Fireside Chat with Sonia Baxendale, the President & CEO of the Global Risk Institute. CAFII’s Executive Director, Keith Martin, began the webinar by thanking all attendees and introducing CAFII’s Senior Research and Policy Analyst, Robyn Jenning, who then introduced Sonia Baxendale, President and CEO of the Global Risk Institute.
In addition to her roles as President and CEO of the Global Risk Institute (GRI), Ms. Baxendale has extensive experience as an executive and non-executive in the global financial services industry. She is an active corporate director who sits on the boards of Laurentian Bank, Definity Financial Corp., and Intermediate Capital Group (ICG). Prior to joining GRI, Sonia held senior roles at CIBC, including Senior Executive Vice President and President of CIBC Retail Markets, where she led the Retail & Commercial Banking and Wealth Management businesses. Prior to CIBC, she held various positions within American Express Canada and at Saatchi & Saatchi.
Ms. Baxendale is a graduate of the University of Toronto, where she was named the Victoria College Alumni of Distinction in 2017. She was named one of the “Top 100 Most Powerful Women in Canada” for three consecutive years and was inducted into the Top 100 Hall of Fame in 2010. In 2000, she was recognized as one of Canada’s Top 40 Under 40.
After introducing Ms. Baxendale, R. Jennings extended a special welcome to several VIP guest attendees, including CAFII’s 14 member companies, 13 Associates, allied industry associations such as the Canadian Life and Health Insurance Association (CLHIA), the Travel and Health Insurance Association of Canada (THIA), and representatives from various insurance and financial services regulators and policy-making authorities, including the following:
- The Alberta Insurance Council
- The Autorité des marchés financiers, or AMF
- The British Columbia Financial Services Authority, or BCFSA
- The Government of BC
- The BC Ministry of Finance
- The Insurance Council of BC
- The Canadian Bankers Association, or CBA
- The Canadian Association of Direct Relationship Insurers, or CADRI
- The Canadian Insurance Services Regulatory Organizations, or CISRO
- The Financial Consumer Agency of Canada, or FCAC
- The Financial Services Regulatory Authority of Ontario, or FSRA
- The Insurance Council of Manitoba
- The Financial and Consumer Services Commission of New Brunswick
- The OmbudService for Life and Health Insurance, or OLHI
- The Financial and Consumer Affairs Authority of Saskatchewan
- The Government of Saskatchewan
R. Jennings opened the webinar by asking Ms. Baxendale to speak about the GRI and its core mandates. GRI was founded after the 2008 Financial Crisis by the then-Governor of the Bank of Canada, Mark Carney, and the late Federal Minister of Finance, Jim Flaherty. The objective was to build risk capability and capacity to position Toronto and Ontario as a center of excellence, which would then be expanded beyond the financial sector. GRI has grown from 13 members to 52, including banks, insurance companies, credit unions, pension funds, a number of Crown corporations, and educational institutions, combining academia, government, and industry.
The foundation of GRI is research, both internal and external, as well as education. GRI has become known for its convening power, bringing together diverse viewpoints, including government, regulatory partners, and industry, on major issues and emerging risks.
Ms. Baxendale was asked what is fundamentally different about the risk environment facing Canadian financial institutions today? Before the 2008 Financial Crisis, most risk was considered financial – market, liquidity, credit, etc. After the Financial Crisis, the focus shifted to non-financial risk, such as operational, conduct, and compliance risk. Ms. Baxendale explained that today the fundamental difference in Canada’s risk environment lies in the complexity, speed, and interconnectedness of current risks. Risk used to be dealt with discretely; this is no longer the case. She identified the top three risks GRI’s members are most focused on: economic uncertainty, geopolitical events, and technological change. These three areas are broadly affecting the risk environment across all FIs.
The links between these risks have become increasingly pronounced in recent years. Technology is an amplifier; it is playing an outsized role, both positive and negative, in risk. Arguably, the most obvious things being impacted are cyberspace and cyber issues.
R. Jennings remarked that one reality of today’s risk environment is that FIs are being asked to account for growing uncertainty in their long-term strategic planning. She then asked Ms. Baxendale which external forces she believes are having the greatest influence on strategic decision-making today, and how organizations are adapting. Geopolitical uncertainty, policy fragmentation, economic volatility, rapid technological change, and affordability pressures are the main forces shaping long-term strategic planning. All these factors, however, are outside organizations’ control, so what can be done? FIs need to evolve beyond the traditional control frameworks. One such way is prioritizing operational resilience. Success will not necessarily be measured by an organization’s ability to predict the next crisis or risk, but by its overall preparedness and adaptability. Strong governance plays a part in this.
What distinguishes organizations that respond well to risk from those that simply react? This goes back to preparedness. The strongest organizations recognize that external risks cannot be prevented or controlled. Rather than trying to eliminate uncertainty, they build resilience, flexibility, and adequate decision-making capabilities into their controls. Strong governance and accountability also play a vital role. In a world increasingly dependent on technology and AI, it is essential that organizations be clear about who is accountable for what and where decision-making resides. Senior management accountability is driven by regulators’ acknowledgment that we need clearer organizational lines on who is actually making decisions. Another crucial determinant is scenario analysis. To conduct successful scenario analysis, organizations need to think broadly and creatively about secondary and tertiary impacts. Organizations that have a transparent, timely escalation and challenge process are crucial. Large FIs that are willing to hear divergent points of view will be more successful than those that are resistant to change or challenge. Ms. Baxendale urged organizations to adopt clear crisis management plans that are flexible enough to respond to environmental changes. FIs need to have the courage to course-correct when faced with barriers.
R. Jennings then asked what AI accountability looks like in practice. Ms. Baxendale explained that accountability is heightened when it comes to AI. It needs to flow vertically; communication must reach across organizational hierarchies and structures so that decision-making and direction are clear. AI is no longer a silo because technology is no longer reserved for specific departments. Technology is now a facilitator for many aspects of business; therefore, AI is often part of strategic or organizational decisions. Accountability requires clarity: is this AI decision a business one or a support-function one? Who is responsible for making strategic decisions versus technological ones?
The housing market remains an important focus for both policymakers and industry. R. Jennings asked Ms. Baxendale, as institutions navigate affordability challenges, slower growth, and changing market conditions, where she sees the most significant risks emerging. The housing market is deeply affected by macroeconomic forces, which, in turn, are influenced by the geopolitical environment. This is where scenario planning is crucial, as it enables a deeper understanding of the implications of these external influences. Canada has already undergone a meaningful correction from peak pricing levels reached during the COVID-19 pandemic. In the Greater Toronto Area and Vancouver, there has been a 15% to 18% correction from the peak. Population growth has declined due to lower immigration, which has significantly impacted the market. This may continue into 2027, with changes to federal immigration policy and homeownership, though no one is certain what these changes will look like. Canadians continue to have high debt relative to income, which is currently at its highest level ever. However, our debt-to-net worth ratio has improved due to increases in home value. The IMF, in its 2025 assessment, identified elevated housing leverage and impending mortgage renewals as prominent vulnerabilities. The Bank of Canada and OSFI, in their assessments, have felt that Canada will withstand those renewals without significant impact to FIs. There will be some impacts to individuals. There are myriad factors influencing Canada’s housing market. Ms. Baxendale feels that, overall, Canada’s financial sector is well positioned, though this will continue to depend on the pace of risk, geopolitical events, and economic shifts.
Ms. Baxendale has described technology as an amplifier of risk. What does that mean for leaders and boards trying to manage risk in this period of escalating change? In the world of AI, leaders and boards should not think of decision-making as separate from AI and emerging technologies; they are now interconnected. AI decisions are strategic or business decisions and must be treated as such. Where organizations are actively using or developing a plan to use AI, leaders must understand their organization’s critical technology dependencies, including any outsourcing to third parties. Outsourcing inevitably incurs risk. Leaders must understand these dependencies and ask themselves what a failure means to their specific organization. Furthermore, boards must ensure that governance frameworks are aligned with adoption as organizations progress.
Many FIs have what Ms. Baxendale described as an “inverted pyramid,” in which the people at the top are the least knowledgeable about AI and emerging technologies. Board members often learn about these tools as an educational exercise rather than through practical use. This fundamentally limits their core knowledge. This is a challenge because it forces leaders to become inherently dependent on other levels of their organization for information and use. This can also create risks, such as leaders being conservative in their use of AI due to a lack of comfort, or deploying AI too quickly because they do not adequately understand the tool, its uses and limitations, and the implications. Humility comes into play; senior people need to be comfortable expressing confusion and asking for help.
R. Jennings asked Ms. Baxendale how businesses should rethink resiliency given the interconnectedness of decision-making, technology, economics, and geopolitics. Ms. Baxendale stated that businesses need to focus on building resiliency. Thinking was once hyper-specific and specialized; now it is a much broader ecosystem in which organizations need to consider third parties, technology providers, and critical infrastructure dependencies. It is no longer sufficient to focus only on internal risk. Resilience is not about prevention; it is about adaptability, responsiveness, and comprehension. Risk is inevitable, but how we respond to it is not. Having a crisis management plan is one way to mitigate the impact of risk. Scenario planning and testing are other approaches, particularly for supply chain disruptions. The GRI strongly supports the consideration of technology providers as critical parts of the financial sector’s infrastructure. This has been done in Europe and other markets, but not Canada. Finally, building redundancy into the conversation around resiliency. While it is expensive, it is and will be useful in the face of risk.
Canada recently released its national AI strategy. GRI welcomed many elements of the strategy while also identifying opportunities to strengthen Canada’s long-term resilience and competitiveness. What do you see as the most important priorities moving forward? Ms. Baxendale thought the National AI Strategy was strong for its emphasis on safety, trust, adoption, and innovation. These are critical foundational components for the financial sector. GRI was disappointed that the Financial Sector was not mentioned more specifically for the role it can and should play on this issue, not the least of which is its early adoption of emerging technologies. As a result, FIs can serve as a source of practice implementation, governance, consumer protection, and operational resilience. What stood out was the need, for both the country and the financial sector, for greater regulatory clarity and coordination across jurisdictions. Without this clarity, it is difficult for individual organizations to invest and innovate at the necessary pace. There need to be clearer pathways for responsible experimentation and innovation. Although steps have been taken, there needs to be enhanced collaboration between government, regulators, and industry. This involves active involvement in helping shape decision-making, including at the national level. The National AI Strategy also stressed the importance of AI literacy.
How should financial services leaders balance innovation, competitiveness, and responsible adoption? The most important thing for every organization is to be built on strategy – what is the goal? What is the strategy? What are the desired outcomes? Then, leaders need to ask: is AI a more effective way to achieve the desired objectives? There is a fine balance between stagnation and innovation. If an organization is not doing anything, it will lose competitiveness; if it is doing too much or going too fast, it puts itself at greater reputational risk. Responsible progress and innovation must be a part of an organization’s strategic plan. This takes time, but with the right collaboration and expertise, it can be achieved.
How can leaders build and sustain trust? Arguably, the most important step is recognizing that failure is unavoidable. There will be disruption. By responding to risk and rupture with transparency, communication, honesty, and genuineness, trust can be built and maintained.
R. Jennings thanked Ms. Baxendale before K. Martin concluded the webinar.
