Thank you, Mr. Chair, and Mr. Kmiec, my colleague who represents his riding very well.
To be as frank as possible, thank you for the intervention.
I have a couple of things to say on the housing market. Canada's housing market has been doing very well for many years. It was very healthy when the former finance minister, Minister Flaherty—may he rest in peace—first started bringing in changes to mortgage rules on the length of amortization. At one time you could do zero per cent for 40 years, and Minister Flaherty subsequently changed that rule and many others. He brought in about seven or eight changes during that time.
Subsequently when we formed government, we've also prudently brought in a number of measures to ensure that Canadians' household indebtedness is under control. Fast forward to last week, the Bank of Canada put out its financial system review and commented that the quality of the debt that Canadians are taking on is improving, i.e., they're not over-leveraging.
We did an in-depth housing study. The committee came out with a number of recommendations. We heard from the Mortgage Brokers Association, and one of their recommendations was that the stress test be applied to both high- and low-ratio mortgages. They met with many of us, the minister and departmental officials, and so forth. They supported that.
On refinancing of mortgages—I know, Tom, you talked about that—nothing within B-20 impacts someone renewing their mortgage. There is the caveat that they have to stay with their existing lender. When I went to renew my mortgage on my house about a month and a half ago, I did not have to undergo the stress test because I stayed with my existing mortgage lender.
As for the stress test of 200 basis points—or wherever the bar is set and how it's calculated—like you, Tom, people have asked me if the level is too high. Is the spread that's put on the number of basis points too much? I have looked at this, and it is still to be determined whether that is too much of a spread or if it's appropriate.
When OSFI made the B-20 rule—and there is also B-21—two rules were brought in to direct us, if I can use that word. They came into effect in January. They were telegraphed for quite a while, and a lot of the measures were supported by the various associations, including the stress test being applied to both new and existing high-ratio, as well low-ratio, loans for CMHC insurance and so forth.
First, sufficient data has not been collected yet to see what impact those changes per se have had on our housing market; second, we could consider OSFI an arm's length agency of the government in its own form. As for what you said about the government not following what was recommended in the finance committee report, I think there's room to differ in how you define government.
Since the minister brought in the changes to the housing market, there have been no further changes. I think it behooves the committee to follow the Canadian housing market closely. A home is any citizen's greatest investment, and we need to make sure that it does not lose any value, which happened in the United States.
In my professional opinion, as someone who follows the market very closely, the measures that have been put in place are prudent, but at the same time, we require a number of quarters to see the direction of the Canadian housing market.
Tom, I understand your concern about the spread. I understand that issue very well. If the spread is impacting first-time home buyers, we need to be cognizant of that. If that trend is there, we need to make sure we follow the data. They've talked about a supply issue. I think a former premier from B.C. just opined on that: Mike Harcourt implied that the supply issue is a concern. There's no housing crisis in Vancouver. There's a supply crisis in single-family housing. This is very complex.
At this time I cannot support a study by a subcommittee, especially going into pre-budget. I am open to revisiting the issue in 2019 when we see some more quarters of data. But at this time, I don't see how we can gain a clear picture of what is going on without receiving a lot more data and having direction. Interest rates have gone up because the economy is doing very well. Bond market rates, which determine the mortgage market rates, have gone up because the economy is operating at almost full capacity, and we're benefiting from that. Short-term variable rates have also gone up because the Bank of Canada has responded so appropriately.
That is my view. Thank you for bringing this forward.