Mr. Speaker, I would like to speak against Bill C-363 as proposed by the hon. member for Beauport—Limoilou to amend the CMHC act to require the distribution to the provinces by Canada Mortgage and House Corporation of surpluses from its reserve fund.
Housing is a fundamental priority of the federal government, as it is for the people of this country. We in the House have a responsibility to ensure that those Canadians who are in need of assistance are able to access a basic level of safe affordable housing.
Through CMHC the government is working to meet that need by helping to increase housing options and accessibility for low income families and individuals, aboriginal people, seniors, those living with a disability and Canadians with special needs. As the elected representatives of all Canadians, we also have an equal responsibility to all Canadians whose needs are met by the marketplace and who are likewise struggling to build a better life for themselves and for their families. To this end we must do everything we can to help our housing and financial markets work better and more efficiently and to ensure that the Canadian housing system remains one of the best in the world.
The ultimate test of our efforts in this regard is the percentage of Canadians who are able to meet their housing needs without having to rely on government assistance. Today, thanks in large part to the efforts of CMHC and its partners, more than 80% of Canadians are well and affordably housed. Sound financial management has resulted in eight balanced budgets, lower interest rates and a series of exceptionally strong housing markets.
A strong housing market combined with good corporate management and numerous public product innovations has allowed CMHC to enjoy several years of record earnings. The federal government and CMHC are already putting these benefits back into the pockets of Canadians through premium reductions and other enhancements to its mortgage loan insurance activities.
As Canada's national housing agency, CMHC is committed to helping Canadians access a wide choice of quality, affordable homes and making vibrant healthy communities in cities a reality across the country. CMHC's mandate as described in the National Housing Act is to promote housing construction, repair and modernization; housing affordability and choice; improvements to overall living conditions; the availability of low cost financing; and the national well-being of the housing sector.
Part of fulfilling that mandate includes building on its long history of innovation and mortgage loan insurance and securitization to offer a wide range of mortgage insurance products and services that help make home ownership more affordable for Canadian homeowners. These products and services continue to evolve to meet the ever changing needs and lifestyles of Canadians across the country and in all markets.
For example, in April, CMHC introduced a package of enhancements and benefits worth $200 million annually. This included a 15% reduction in mortgage loan insurance premiums for home buyers with as little as a 5% down payment. This is CMHC's second premium reduction for homeowners in two years. This means that a home buyer with a $120,000 mortgage and 5% down payment who obtains a CMHC insured mortgage will save a total of $600 on the purchase of his or her home. Combined with the premium reductions announced by CMHC two years ago, that homeowner is now saving 30%, or $1,200, on the purchase of his or her home.
To increase both the affordability and energy efficiency of Canadian homes, CMHC is offering a 10% refund on mortgage loan insurance premiums for homeowners who purchase an energy efficient home or who make energy-saving renovations to their existing homes.
CMHC also eliminated its mortgage insurance premiums on rental projects under both phases of the affordable housing initiative and other projects with rents that are low enough to meet the needs of households who qualify for social housing. This will result in significant savings to sponsor groups in the order of $300,000 on a $5 million loan with a loan to value of 95%.
For affordable rental housing projects that meet the criteria of CMHC's partnership flexibilities, CMHC implemented a further 15% reduction in mortgage loan insurance premiums. This follows on a 20% reduction announced in 2003, for a total reduction of 35% below the premiums that are charged for regular market housing. For a project with a $5 million loan and a loan to value ratio of 95%, the combined benefit of these premium reductions will amount to a savings of almost $100,000.
More than 633,000 units of social housing are currently managed by CMHC provincial and municipal housing agencies or by local, non-profit organizations such as housing cooperatives and urban aboriginal groups. On behalf of the federal government, CMHC supports social housing by subsidizing these units on a cost shared basis with provincial and territorial housing agencies. If we are to successfully meet the housing challenges of tomorrow, we must continue to work in collaboration with all our partners, including all levels of government, industry and community groups, aboriginal peoples, and the social and private sectors, to build on what we have achieved so far.
Partnerships such as these are at the core of CMHC. It has only been through the active engagement of its partners and stakeholders that CMHC has been able to foster such an impressive housing legacy for the benefit of all Canadians.
Today, a wide spectrum of housing solutions in Canada involves both market and assisted housing. Through CMHC the government is demonstrating its commitment to making housing more affordable for both market and assisted housing needs on all parts of the housing continuum.
Canadians should be proud of their housing finance system. It is a system that provides low cost mortgage funds throughout the country with equal access for all Canadians in good economic times and bad.
Bill C-363 would tie the government and Parliament to an inflexible formula. Too often critics suggest that homeowners get no benefit from the purchase of mortgage insurance; that it is a cost borne by the homeowner to protect lenders. Clearly, the homeowners do benefit financially through lower interest rates, but they are also able to acquire their home earlier and benefit from the growth in home equity sooner. CMHC is also the only provider of mortgage loan insurance for rental housing, retirement and nursing homes in Canada, forms of housing that touch the lives of many Canadians.
CMHC pays claims from the premiums it charges and does this without government subsidy. As such, CMHC sets aside reserves for capitalization to ensure that it remains financially viable through good economic times and bad, and where CMHC has been able to gain efficiencies in its operations, it has passed this benefit back to Canadians through a reduction in mortgage insurance premiums.
In addition, CMHC's capital reserve helps ensure this important and effective crown corporation, which is at the heart of this country's housing finance system and remains self-funding with no need for government subsidies. Let us not deprive CMHC of its ability to do the job we have entrusted it to do for the benefit of all Canadians.