CMHC takes more steps to restrict Canadians’ access to homeownership
OTTAWA – June 5, 2020 – As Canada looks hopefully towards economic recovery, the Canada Mortgage and Housing Corporations announcements yesterday to further restrict access to insured mortgages, especially for first-time homebuyers, further emphasized the Crown corporation’s leadership’s desire to reduce homeownership in Canada, while also reducing activity and therefore jobs in residential construction.
Fortunately, this measure only applies to CMHC and as such, Canada’s private mortgage insurers, Genworth and Canada Guaranty, are not directly affected. Early indications seem to suggest that the private insurers will not follow in lockstep with these changes, particularly around debt service ratios, but each are currently determining their specific response. As we await more details, it does appear this will result in additional competition and a shift in market share away from CMHC over to private insurers.
Still, the timing of this change, which will limit new buyers getting into the market at a time when the economy is looking towards investment is rightly being criticized. CMHC’s mortgage insurance business historically pumps billions of dollars annually into federal coffers to support other programming, and its backstop program is supposed to be there in times of trouble. This decision at this time will instead prevent many well-qualified Canadians from becoming homeowners—Canadians who still have well-paying jobs and should be able to buy homes as part of their financial futures and as contributors to economic activity. It will also dampen the role that residential construction should play in terms of job creation in a robust economic recovery.
As CMHC moves to limit access to homeownership and reduce the size of its portfolio, the question now becomes what the government will do with its policy levers to support recovery in the housing sector.
“Unfortunately, this is not a surprise, given CMHC’s express intention in recent times to reduce homeownership rates in Canada. That plan is of course out of touch with Canadians’ and particularly the next generations’ aspirations for homeownership,” said CHBA CEO Kevin Lee. “CHBA is calling on the Government of Canada to implement measures to support economic recovery in residential construction, a proven job and investment multiplier, while also allowing Canadians to meet their housing needs and aspirations at a time when a secure, and appropriate home means more than ever.”
About the Canadian Home Builders’ Association
The Canadian Home Builders’ Association (CHBA) is the voice of the
residential construction industry in Canada, representing more than
8,500 member firms across the country. Our membership spans new home
builders, renovators, developers, trade contractors, building material
manufacturers and suppliers, lenders, and other professionals in the
To request an interview with CHBA CEO Kevin Lee, please email firstname.lastname@example.org.