One thing I would add is that some of the profit from these mortgage transactions is earned by the mortgage insurers, because a premium is paid and they have to hold capital against that. In the case of an insured mortgage, the capital is held principally not by the lender but by the insurer. These sorts of risk transfers are common in the financial system.
All I can say from my own experience is that prior to the global financial crisis, there were some concerns about this approach, which is, if not uniquely Canadian, nearly uniquely Canadian, but a lot of observers felt that it was helpful to Canada in navigating through the global financial crisis.