Thank you, Mr. Chair.
Thank you to all the committee members for inviting the Canadian Real Estate Association to appear before you today.
As you know, our membership is composed of more than 85,000 realtors who represent and advise Canadians on the purchase and sale of real estate. Last year our members sold more than 483,000 homes across the country.
Realtors believe that the Canadian market is generally well served by the presence of two mortgage insurers. Our association believes that both CMHC and Genworth do an excellent job of serving the needs of Canadian homebuyers, particularly first-time buyers and those individuals in the secondary market who would otherwise find difficulty in obtaining mortgage financing. I am also pleased to report that our industry has an excellent working relationship with both insurers and continues to work collaboratively with them to serve the needs of our customers.
As a whole, realtors believe that the current premiums are price competitive and feel it is critically important that all geographic markets and income strata continue to be served. This being said, we understand the task before you today is to gather more information to help assess whether the federal government should proceed in altering the existing system by allowing new insurers to enter the Canadian market.
Realtors fully support competition and believe that new entrants will undoubtedly bring benefits to certain segments of our marketplace. As such, we would welcome new entrants into our mortgage insurance market. In addition to bringing price competitiveness to lower-risk customers in the high-ratio market, our membership expects that new players would provide product and service innovations where gaps currently exist. For example, we will be looking to four firms to make mortgage insurance more accessible for investment and commercial transactions.
We also believe that if a policy decision is taken to permit market access, this should be done as quickly as possible and without any undue delays. At the same time, we also have some concerns. We believe that any decision taken must never weaken the soundness of our system nor make it more difficult for mortgage insurance to be obtained, irrespective of region or income strata.
Observers often point to the U.S. experience as an example of success. This is undoubtedly true. However, there are also some problems with their system. We feel it is important for market entrants to serve as many Canadian homebuyers as possible, not just the wealthiest or those living in urban centres.
The issue of government guarantee has also been raised. Realtors understand that the public mandate of CMHC is to provide an affordable and competitive mortgage insurance product for those Canadians who need it, particularly to markets that are not necessarily the most attractive or profitable. Realtors strongly believe that affordable home ownership is a public good and that the federal government must not withdraw from the housing policy arena. For this reason, we believe that the crown corporation must continue to receive a full 100% guarantee.
We also recognize that private sector firms operate under different constraints and should be treated accordingly. For this reason, we feel that the current 90% guarantee is reasonable and should be available to new market entrants as well.
Thank you again for the opportunity to speak before you. I will be happy to answer any questions you might have.