Thank you, Mr. Chair. I'm excited to be here to talk about an important issue for Canadians.
I'd like to direct my question to Mr. Pomeroy. He mentioned something in his opening remarks that I thought was interesting. He said it's a demand issue, and not just a supply issue. What I've seen over the last two decades is the breakneck pace at which mortgage credit has grown, and, arguably, that's one of big reasons why housing has become unaffordable in Canada.
If you look at the data, mortgage credit stood at about $400 billion in the year 2000. I'm speaking in nominal terms now, so it was about $400 billion in the year 2000. It jumped to about $1 trillion in 2010, and then it doubled yet again to $2 trillion in 2020. If you look at the compounded annual growth rate, it's 7.5% over that 20 years, far ahead of population growth and inflation, and far ahead of nominal GDP growth. During the last two years alone, it has jumped by another $300 billion to $2 trillion. Sorry, it was $1.7 trillion in 2020, and then it currently jumped to $2 trillion.
Arguably, if the Office of the Superintendent of Financial Institutions, OSFI, and CMHC, which I know you have some experience with, and Finance Canada had issued regulations to slow the growth in mortgage credit to something more reasonable, in line with population growth and inflation—let's say something around the range of 3.5% per annum—we could have moderated house price increases.
Finally, before I get your comment on this, there's a further example of what I'm talking about. In March 2020, OSFI relaxed the rules concerning domestic stability levels. That's the domestic stability barrier of 1% that's required by the big banks, and that decision freed up an additional $300 billion in capital that the banks could then loan out, and, commensurately, mortgage credit growth jumped by some $300 billion over the last two short years.
My view is that if OSFI, Finance Canada, and CMHC had put in place measures to ensure that this additional $300 billion in credit didn't all get plowed into residential real estate, but perhaps into business lending and small business lending, and if other measures like that had been more broadly applied in recent years, we might not have ended up in this affordability crisis we're seeing now.
I wonder if you could comment on that.