I had the opportunity to address the Saskatoon Region Association of Realtors at their Mortgage Update Forum. The following is my address:
In October 2016, the Liberal government introduced changes to Canadian mortgage rules, which made it more difficult for Canadians to qualify for a mortgage.
The changes were designed to deal with rising housing prices in Toronto and Vancouver and they were implemented without consultation. The results have not been successful. These changes have made it much more difficult for first-time home buyers to buy a home.
In fact, the Bank of Canada estimates that one third of mortgages issued in the past two years would not qualify under the new rules. Stakeholders broadly supported this view and the Liberals’ rule changes have hurt realtors here in Saskatoon and in other cities and towns across Canada.
The Liberals’ ill -conceived mortgage rule changes have also hurt mortgage brokers, credit unions, other lenders and construction companies too.
In early February, the House of Commons Standing Committee on Finance, heard testimony from concerned groups across Canada. The message was clear: these measures are not working.
While the mortgage rule changes were designed to deal with situations in Toronto and Vancouver, the one-size-fits-all approach is hurting housing markets across the country.
Unfortunately, as these policies were designed with only specific regions of Canada in mind – specifically the “heated” housing markets of Toronto and Vancouver, it is no surprise that they have had a negative impact on other housing markets across the country, given the vast difference in housing markets from coast to coast to coast.
One witness at the Finance Committee went as far as to say that the changes were akin to “bashing a nut with a sledgehammer”.
As it affects rural communities, the Canadian Mortgage Brokers Association commented before the Finance Committee that the changes may induce many mortgage lenders to reduce their activity in rural areas because of an increased risk of lending there. The Canadian Credit Union Association also expected fewer mortgage approvals in Canada’s rural and remote regions.
This would make it more difficult for Canadians in rural communities to access mortgage services and make it harder for small credit unions and mortgage brokers to compete.
We believe the government needs to ensure that these small mortgage lenders and Credit Unions remain competitive, rather than advantaging the large banks. The Conservative Party believes the Government should roll-back their changes of October 2016 and abandon plans to change risk-sharing in the future.
The Conservative MPs on the Finance Committee were strongly opposed to the Liberals’ mortgage rule changes and the report that was issued in April of this year (2017) by the Liberal-dominated Finance Committee. The Finance Committee report was entitled: “CANADA’S HOUSING MARKETS: BENEFITS, BARRIERS AND BRINGING BALANCE.”
In closing, let me say that the Liberals’ mortgage rule changes, combined with the other taxes the Trudeau government have increased, like payroll taxes and a planned national carbon tax, will make it harder for Canadians to save money in order to make the biggest investment they will ever make in their lives—buying their first home.