Thank you, Derek.
Thank you, Mr. Chair and members of the committee, and thank you all for the opportunity to be here today.
Let me begin by reiterating CMHC's commitment to the aim of special examinations required by the Financial Administration Act.
These audits provide the government, parliamentarians and Canadians in general with independent assurance that CMHC has the necessary systems and practices in place to safeguard our assets, that we efficiently and economically manage our resources, and effectively carry out our operations.
They also help build trust in CMHC, a systematically important financial institution with a legislative mandate to contribute to Canada's financial stability and facilitate access to housing.
They make CMHC a stronger company by identifying management deficiencies that we need to address.
I'd like to respond to a few areas. In addition to the corporate management practices that Derek has spoken about, the most recent audit also focused on two other key areas—on the one hand, management of our mortgage loan insurance, securitization and assisted housing lines, and on the other hand, management of organizational transformation initiatives. The Office of the Auditor General recommended, for example, that we enhance our assessment and documentation of the capital required to cover all material risks faced by CMHC, including reputational and strategic risks. I'm pleased to report that an assessment of these capital requirements was recently completed.
Stress testing is a crucial discipline as we continue to improve our work at CMHC. We've identified additional ad hoc stress tests, again in response to a recommendation from the OAG, to ensure that we better understand and are able to respond to vulnerabilities in the event of extreme crises. Notably, I should emphasize to committee members that we are the only Canadian financial institution to publish our stress testing results publicly, every year, as part of our commitment to transparency.
As you may also be aware, CMHC is a much-transformed institution. We are a proudly innovative and client-oriented vehicle for housing policy and housing affordability throughout the economic cycle. In 2015 we began a multi-year initiative to modernize and transform our technology and business practices. The special examination auditors made a number of recommendations related to this work. We're in the process of responding to each of them in accordance with our action plans. For example, we have established a new division to oversee project and change management initiatives and to facilitate reporting to senior management and the board on these initiatives. We've clearly defined the objectives, outcomes, performance measures and expected benefits of our transformation projects. We advise the board of key achievements on a regular basis.
The OAG also recommended that the board of directors should play a more active role in setting CMHC's strategic direction. Again, we had already taken this recommendation into account by the conclusion of the examination. As a matter of fact, last year we engaged in a thorough review of our strategy. It was discussed at three separate board meetings, including a session dedicated completely to this topic. The review also absorbed a lot of our time at the executive committee. This is not to mention the work of a dedicated strategic advisory group that met multiple times. We established a strategic function at CMHC with a series of full-time colleagues.
In short, the board played a key role in the development of our new housing affordability strategy, which housing stakeholders have endorsed across the country. As Derek noted, our strategy sets out the bold aspiration that by 2030, everyone in Canada will have a home that they can afford and that meets their needs. Clearly, this is an ambitious goal and one that exceeds the targets inherent in the national housing strategy of removing 500,000 households from housing need and reducing homelessness by half from 2018 levels. Nonetheless, achieving housing affordability is vital to all for Canada's future economic health, social stability and inclusion. We recognize this, as do housing providers and our many partners across the country. Indeed, we believe CMHC exists for this single purpose, and we recently restructured our company to deliver results for Canadians and ultimately to achieve our aspiration.
I am sure Derek agrees with me that we are particularly proud of our employees' resilience and commitment throughout this process. As a result of the restructuring, 215 employees changed roles. Two out of three employees are now reporting to a new leader. Despite all of these changes—the third significant reorganization in five years—we continued to provide uninterrupted service to Canadians. Our project portfolio remains largely on track.
Supported by this team of dedicated employees, the initiatives included in the national housing strategy and new measures proposed in budget 2019 provide a solid base for our new affordability strategy. Nevertheless, we realize that we will need to go further and faster to reach our goal.
At the same time, as a crown corporation with the “sacred trust” of managing public resources, we are committed to being a leader in housing risk management and an accountable, transparent, efficient and innovative organization that is admired and trusted by Canadians from coast to coast to coast.
That concludes my remarks. Thank you again for inviting us to be here. We look forward to the committee's questions.