There was a Financial Post story looking at CEO bonuses at the big banks despite the fact that revenues were off from last year, although they were still making profits. Despite the fact that revenues were down in the banking sector, CEOs' benefits and their bonuses seem almost entirely unaffected. CEOs will continue receiving the same massive bonuses that they received in previous years, despite the actual performance of the company. The situation is that if times are really good, CEOs get big bonuses. If times are bad, you change the rules, and CEOs get big bonuses, and I think we'll see exactly the same thing this year, as we've already seen most of the proxy circulars come out for the big banks.
One of the arguments I was making in June was around the deferment of mortgages, which came about as a result of federal government regulatory changes. It wasn't at the banks' behest that this happened but rather because the federal government changed the rules. Household debt has risen from about 100% of GDP, where it stood for several years, up now to 110% of GDP, as of the latest data, partly because of those deferments. People took banks up on those deferments and built up a bit of a cash reserve so they were better able to make their mortgage payments. Thankfully we haven't as of yet seen mass defaults as a result of the deferment programs ending.
When it comes to asking more of banks, I think one of the things the federal government could be asking for from banks is a substantial reduction in the cost for homeowners to break particularly fixed-rate mortgages. Those fees can be high. They can be very unpredictable, and given the support that the banking sector receives and that CEOs continue to receive through bonuses, I think it's fair to ask the banking sector to reduce the fees that they're charging people to break mortgages, typically fixed-rate mortgages, in the hopes that if Canadians do continue to see sustained job loss and they can't make their mortgage payments, then at least in a high-cost housing market, they're able to sell their houses and get into something that they can afford.