Good afternoon, everyone. My name is Peter Vukanovich, and I'm the president of Genworth Financial Canada. We are Canada's home ownership company. Since 1995 we've helped over 700,000 low- and middle-income families achieve the dream of home ownership, both affordably and efficiently. I want to thank the committee today for having me here and allowing me to participate in these consultations.
You'll be pleased to know that I'm not here asking you for any money. However, I would like to remind you of the vital importance to our economy of a healthy and stable housing finance system, and to ask you to consider two recommendations to strengthen the system and benefit Canadian homebuyers.
For nearly a decade we've enjoyed a robust housing market characterized by record housing starts, steady price appreciation, and rapidly expanding access to mortgage credit. As a result, the wealth of many Canadians has grown substantially. However, it's becoming increasingly clear from a range of indicators that the housing market is slowing. Like all economic sectors, the housing market moves in cycles, and at this time in the cycle, it is more important than ever to ensure that we have strong mortgage insurance providers in our country.
Let me share with you two fundamental reasons why Canadians need strong mortgage insurers to mitigate the impact of a potential slowdown. First, it's our business to help more than 150,000 families a year who rely on mortgage insurance to get into a home. We also want to help them stay in it, even when they encounter periods of economic distress. Rather than force foreclosures on homeowners who temporarily default on their loan payments, mortgage insurers are highly incented to help people stay in their homes. This includes deferring payments and forgiving loans, and we do these things many hundreds of times a year for people in distress.
Additionally, when housing markets slow, defaults increase—that's the business we're in. Mortgage insurers play a vital role in speeding market recoveries by ensuring that there are mortgage funds available in both good and bad economic times, from large and small lenders alike. Rather than exit the markets as a result of increased claim payments, mortgage insurers stay committed. They stay committed to markets by writing new policies and by drawing on the reserves they have built up over the years during good times. The good news is that unlike in the 1980s and 1990s, today's insurers are currently well-positioned to keep delivering these important benefits to homebuyers.
I'd now like to suggest two important actions that this committee can recommend to strengthen the current mortgage insurance marketplace to the benefit of both homebuyers and the economy. These will likely sound familiar to many of you, as I was before this committee earlier this year.
The main thing we'd like to see is for the federal government to finish the job it started in last year's budget, when it introduced legislation to allow new entrants into the mortgage insurance market. As I told this committee earlier this year, I'd like to emphasize again that Genworth Financial fully supports and welcomes the principle of increased competition. However, we believe that the federal government's own goals of providing “greater choice and innovation in the market for mortgage insurance, benefiting homebuyers and promoting home ownership” will be undermined unless additional measures are introduced to support the legislation.
We believe the federal government should introduce market conduct rules or safeguards to ensure that the Canadian homebuyer actually benefits from this increased competition.
I have a legal opinion here from one of Canada's leading experts in the area, stating that the “current provincial insurance legislation does not adequately protect the policy goal of ensuring that the benefits of competition in the mortgage insurance industry inure to the people who ultimately pay for the mortgage insurance, the homebuyers, and not to those who get the benefit of the insurance, the mortgage lenders”.
We've made progress on this issue. We're very pleased. We've spent a lot of time at the Department of Finance. I would be very appreciative if this committee could recommend to the minister and the department that they go along with our recommendation.
Our second recommendation is to level the playing field with regard to the government guarantees to back up all players in the marketplace. I've told you about this before. It creates for our customers a difference in pricing whose time has passed. It made sense at one time in history, but based on the products and services delivered today, lenders should be choosing the product that best serves consumers.
In summary, the viability of Canada's real estate market is largely within the federal government's ability to control. Given the importance of this sector, we strongly suggest that the federal government do what it can to ensure that it remains strong and competitive and beneficial to Canadian homebuyers.
Mr. Chair. I appreciate your having me here. I'd be happy to answer any questions at a later time.