Thank you, Chair and members of the committee.
My name is Jasmine Toor. I'm here on behalf of Mortgage Professionals Canada, representing mortgage brokers, lenders, insurers and other professionals who help Canadians access housing finance.
We welcome several measures in the spring economic update and Bill C-31 that strengthen Canada's housing finance system and expand choice for consumers. In particular, we support the decision to allow private mortgage insurers to insure residential properties of up to eight units, changing the definition of a residential home from four units to eight.
Current federal regulations for mortgage insurance set the maximum number of units on a property that can be insured at four. When purchasing buildings with more than four residential units, buyers therefore do not have access to insured mortgages, which typically offer lower interest rates than the commercial mortgages to which those buyers are limited.
As the government seeks to increase housing supply and reduce the cost of bringing new housing online, increasing the maximum number of units that can be mortgage-insured on a property will make residential properties more financially attractive to build and own by granting owners access to the lower interest rates of insured mortgages. This is a practical change that can help unlock financing for smaller multi-unit housing projects—the kind of “missing middle” housing options that Canada urgently needs. It gives lenders and borrowers more options that can make smaller-scale rental and multi-unit development more viable.
We also support the increased mortgage funding and insurance capacity proposed in division 7 of Bill C-31.
Clause 266 increases the securities guarantee ceiling. Not every mortgage lender funds itself through deposits. Many lenders rely on securitization to compete. Greater capacity can support a more diverse lender market, greater competition and more choice for Canadians. Greater competition can ultimately help Canadians access more competitive financing.
Clause 267 increases the aggregate protected loan limit from $300 billion to $500 billion. This provides greater capacity for privately insured mortgages and supports competition among mortgage insurers and the lenders that rely on their coverage.
These are all positive steps towards a mortgage market with more competition, more capacity and more choice for Canadians.
I also want to thank this committee for its continued leadership, and in particular for recommendation 44 in its recent pre-budget report. The recommendation recognizes the need to “Strengthen efforts to combat fraud, money laundering, and financial crime through better coordination between governments, law enforcement, and financial institutions.” We would add mortgage brokers to that list, as brokers serve as a critical component of mortgage financing in Canada.
The report also recognized the need for the federal government to deliver a CRA-enabled, taxpayer-consented income verification tool to help prevent mortgage fraud. Mortgage Professionals Canada, alongside other associations such as the Canadian Bankers Association, the Mortgage and Title Insurance Industry Association and the Canadian Credit Union Association, has advocated this for years. We appreciate the committee specifically recognizing the importance of moving it forward.
The federal government first committed to advancing income verification in the 2024 fall economic statement. One of the most practical steps that the federal government can take is to deliver a secure digital system that allows income to be verified with the CRA, with the consent of the borrower and appropriate privacy safeguards. This would make the mortgage process more reliable. It would help combat mortgage fraud, reduce reliance on documents that can be altered or falsified, reduce unnecessary paperwork for Canadians and give lenders greater confidence in the information they use to make lending decisions.
Our message today is simple: Mortgage Professionals Canada supports measures that increase mortgage funding and insurance capacity. A strong housing finance system needs a diverse range of lenders and insurers so that Canadians have access to competitive financing and meaningful choice. We encourage the government to complete these measures by acting on the committee's recommendation on income verification.