Evidence of meeting #3 for Human Resources, Skills and Social Development and the Status of Persons with Disabilities in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cmhc.
A recording is available from Parliament.
President, Canada Mortgage and Housing Corporation
Unchanged. It's exactly the same.
President, Canada Mortgage and Housing Corporation
It's just the flexibility with which they can spend that money that has been expanded.
Liberal
Rodger Cuzner Liberal Cape Breton—Canso, NS
I'll turn to your experience with those programs. Typically at the end of the year they are very well subscribed. I would think from province to province they are very well subscribed. Typically, what would be the percentage of the number of persons who make application who aren't able to be funded in a particular year? Would you track that?
President, Canada Mortgage and Housing Corporation
Actually, where we deliver is in very few places, and of course we won't be going forward under the new framework. For instance, in Ontario where we deliver the RRAP program, we just do a continuous intake of applications. So it's not as if there's one time in the year and a proposal call and a cutoff at a certain point. We continue to take applications as long as we've got funding to spend.
Liberal
Liberal
Rodger Cuzner Liberal Cape Breton—Canso, NS
You start again and you just take them out of the queue—
Liberal
President, Canada Mortgage and Housing Corporation
No, each province will do something a little different. For instance, taking the case of Newfoundland perhaps as an example, they'll do a proposal call once a year. In other jurisdictions, they may do proposal calls two or three times a year. We just found it easier to do continuous intake. It just seemed for us to be a little bit more efficient.
Liberal
Rodger Cuzner Liberal Cape Breton—Canso, NS
Typically, at the end of the year are there many that have to be carried over?
President, Canada Mortgage and Housing Corporation
Again, in our case, because it's continuous—
Liberal
Conservative
Liberal
Rodger Cuzner Liberal Cape Breton—Canso, NS
I can give them to the NDP as a bonus, as a parting gift.
Conservative
The Chair Conservative Ed Komarnicki
We're going to switch to a new round.
Mr. Butt, please go ahead.
Conservative
Brad Butt Conservative Mississauga—Streetsville, ON
Thank you very much, Mr. Chair.
Thank you very much for being here. Much like Mr. McColeman, I had a previous life before being elected to this fine place. I was the president and CEO of the Greater Toronto Apartment Association, a job I held for 12 years, and I had very regular interaction with your folks in Toronto and your Ontario office on Sheppard Avenue. I do have to say it was always a pleasure working with your fine people there on a number of initiatives that I very much enjoyed working on with them. Obviously, CMHC has played a major role in the mortgage insurance business, and the owners and operators of rental apartments—who were, of course, the members of my association—were most interested in the valuable support that CMHC provides in that area.
I do want to talk a little bit about the mortgage insurance program. Would you say that is pretty much the primary business role of CMHC, that mortgage insurance business?
President, Canada Mortgage and Housing Corporation
I wouldn't say it's the primary role, but it certainly is the biggest commercial aspect of what we do. As I described, we touch all areas of the housing continuum. The two biggest areas are assisted housing and the many billions of dollars that are spent in that area. The second would be mortgage insurance.
Conservative
Brad Butt Conservative Mississauga—Streetsville, ON
On the mortgage insurance side, obviously it's a business designed to make you money. Is there any requirement in the money that CMHC is making off this that a portion or a minimum amount of it must be reinvested in other housing programs? That's the first question.
Second, is there a reserve ratio, for lack of a better term, or how much you have to hold back versus how much you can lend out? What are the rules around that?
Could you provide some clarification on those two items, please?
President, Canada Mortgage and Housing Corporation
Thank you.
With respect to the first point, no, there's no ability to use funds from mortgage insurance for social housing programs. There are two very clear mandates. Those two areas don't get mixed. For assisted or social housing we receive appropriations from government and are accountable for the spending of that. For mortgage insurance, premiums are paid by borrowers and claims are paid from those premiums. There is no commingling, if I could call it that, between these two business lines.
With respect to the second question on how much in the mortgage insurance area we have to reserve or set aside, I mentioned in my comments that we follow the standards that the Office of the Superintendent of Financial Institutions sets for private mortgage insurers. There are very detailed calculations based on your business as to how much minimum capital you must hold to support that business. In CMHC's case, we hold twice the minimum level that OSFI recommends.