Oops.
The reality, Mr. Speaker, is that it was tremendously irresponsible for the Minister of Finance to introduce 40-year mortgages with no down payments in his first budget in 2006.
The Liberal opposition raised repeatedly, day after day in this House, the housing bubble, a bubble that was mentioned earlier by Mark Carney, the Governor of the Bank of Canada, in reports, including an extensive report in The Economist magazine a few months ago that cited the housing bubble in Canada. When we raised questions to that effect, the Minister of Finance, the government, continually rejected our assertion that this was a problem that needed corrective action.
The reality is that it is not just a housing bubble but a personal debt bubble that we have in Canada. The average Canadian family owes $1.50 for every dollar of annual income.
Again, the Governor of the Bank of Canada, Mark Carney, has described housing as “severely unaffordable” and that we must remain vigilant against an upcoming correction.
Under the previous Liberal government, mortgage rules were prudent. There were 25-year mortgages with 5% down payment required. That was changed under the current government to 40-year mortgages with no downpayment. Then it reduced them to 35 years with a 5% downpayment, and then 30-year mortgages. We hope that the Minister of Finance will soon get back to the prudent Liberal policy of 25-year mortgage amortizations.
The government is now asking us to take on more risk, effectively. The CMHC limit was $350 billion in 2008 and that has been raised to $600 billion. Ultimately, we recognize that there could be a strong argument made for raising the limit. However, this is a very significant public policy matter. It deserves more debate than what is being afforded in this budget discussion. We should have an informed vote on it and, frankly, part seven should be introduced as a separate bill and be studied very carefully.
These are important issues, if we consider the level of debt Canadians have and the importance of real estate as the principal asset that many Canadian families rely on for their income and financial security in their retirement. I think there is a strong argument to be made that part seven should be a separate piece of legislation and be afforded more diligence in this Parliament.