Thank you, Mr. Chair.
It's good to be back at work in Parliament again. Let me start with a little dialogue with everyone. I've taken the time to read the FSR report of December and June, and the comments of Mr. Siddall from CMHC from Vancouver and from London, and the CMHA report. I take an interest in OSFI's work all the time, because it was part of my past life.
Mr. Rudin's speech on sound residential mortgage underwriting in a changing environment, delivered on November 28, 2016, plus his remarks on bank capital, was interesting, along with all of our government's actions with regard to the housing market.
I look at this and I ask myself what worries me. If I can use a term from a book, where is the black swan? Is there one out there, and can we even identify it? Usually you can't until it's passed. What may trigger some sort of event in our housing market?
I look at what happened in the United States. We don't have NINJA loans; we don't have adjustable-rate mortgages; we don't have the large subprime market that they had. Our underwriting standards are top-notch, but we have household indebtedness. We have housing market imbalances due to the supply side, and we have a lot of regulatory change that is happening. So when I look at it, I ask myself what event out there may cause trouble for us and what exogenous event even more so. It could be a regulatory event in consequence of a regulatory action, and it's the exogenous side that scares me.
The simplest one that comes to mind is employment, or some sort of employment shock to the system, and you will see it in auto delinquencies or housing delinquencies. But we know that Canadians pay their bills. We are the best consumers in the world, basically. You can look at the data. I saw it in my past life and I follow it currently.
I look at the Canadian housing market, and we are regional markets. Measures that are introduced nationally may have unintended consequences in some markets. Toronto and Winnipeg are two different housing markets. I would argue that the housing markets in Toronto and Vancouver are like those in London and New York City 20 to 30 years ago, in which a million-dollar purchase price, which is not covered by an insured loan anymore, is just a million-dollar purchase price. The dream of having a backyard isn't there. You have to move to the suburbs.
A lot of the actions our government has taken pertain strictly to the insured market, which is 20% of the mortgage market, while 80% of the mortgage market is conventional. Please correct me if I'm wrong, but 20% is insured and 80% is conventional, uninsured. The housing price equation is not being driven by the first-time buyer; it's being driven by the conventional buyer, i.e., the low-ratio buyer.
In terms of the housing price equation, to me it's the housing market imbalances that are of greater concern, the supply factor, not the first-time buyer. That's one thing. My question, in a roundabout way, is what concerns us? I understand that financial stability is important. Since 2008 we've introduced a ton of measures—B-20 and B-21 and so forth. The new higher CMHC premiums for mortgage insurance came out earlier this week.
Mr. Tremblay, sir, risk sharing is a bad idea. It's going to result, in some mortgage markets in Canada, in consumers being dinged 30 to 50 basis points, especially in areas where economic growth is not as buoyant as in other areas.
I'm going to stop there. There are three minutes for remarks. I can go on for an hour on this thing, as you can tell.
I'm going to leave it there, but what black swan should we be worried about that is concerning for the Canadian housing market? Leave yourselves 45 seconds each.