Hon. Clément Gignac: My question is for the Government Representative in the Senate.
Yesterday morning at the National Finance Committee meeting, my colleagues and I heard from representatives of the Canada Mortgage and Housing Corporation, or CMHC, and we talked about the tools that this Crown corporation has to address the current housing crisis.
I questioned the CMHC’s intention to potentially review the eligibility criteria for insured mortgage loans. I would like to note that, under the current regulations that were adopted in 2012, the amortization period cannot exceed 25 years and the maximum amount of the loan cannot exceed $1 million. I was told that it is up to the Department of Finance to make that decision.
With interest rates soaring over the past 18 months, many young households who want to buy a first home and who have a down payment of less than 20% will be simply unable to get a loan from the CMHC if the amortization period remains at 25 years. At the same time, those young households have to continue renting for longer and that puts pressure on the demand for rental units, which is already very high.
Senator Gold, this problem is even worse in the Toronto and Vancouver areas because the limit of $1 million imposed by the CMHC is now well below the average price of a house, even a semi-detached.
My question is as follows: Don’t you think, Senator Gold, that the time has come for the Minister of Finance to review the eligibility criteria for a CMHC-insured loan? Right now, parents and grandparents are having to step up and fill CMHC’s shoes to help their children buy a home.
Hon. Marc Gold (Government Representative in the Senate): Thank you for the question. The government knows full well that it is unacceptable that home ownership is out of reach for many people.
I also know that the eligibility criteria for mortgage insurance can play an important role in supporting the financial stability of lenders and, by extension, homeowners.
In recent years — during the pandemic, for example — the government effectively modified the eligibility criteria so it could help Canadians who were struggling. The government continues to consider all possible solutions to make housing affordable again.
I would be pleased to share your comments with the government so a more thorough study can be done.