CMHC could be pulled out of mortgage insurance business, Flaherty says

Garry Marr  Apr 27, 2012 – 6:33 PM ET | Last Updated: Apr 27, 2012 7:33 PM ET

Finance Minister Jim Flaherty would consider taking Canada Mortgage Housing Corp. out of the mortgage default insurance business he told the National Post’s editorial board.

‘I don’t think it’s essential that a government financial institution provide mortgage insurance in Canada’

“Over time, I don’t think it’s essential that a government financial institution provide mortgage insurance inCanada. I think what’s key is that mortgage insurance is available at a reasonable cost inCanada. I think there is a role to regulate but whether we, the Canadian people, have to be the owners and shareholders of a financial institution to do this is a question. I don’t think it’s essential in the long run.”

He offered no timetable on when the government could get out of mortgage default insurance business, just offering it up as a possibility. “We have a list of Crowns, Crown agencies that are being reviewed,” said Mr. Flaherty.

In a wide-ranging discussion on the housing market, he said he has no plans to increase CMHC’s current $600-billion loan limit, ruled out any possibility of regulating foreign real estate investment and made it clear his focus is on the governance of Crown corp. which controls about 75% of the mortgage default insurance business in the country.

“For some time now I’ve had concerns about the large commercial role that CMHC now plays. CMHC has become a significant Canadian financial institution. As you know, historically it was created with a mandate post-war to advance housing inCanada. It’s become much more that.”