Mr. Speaker, the Liberal government likes to boast about supposedly unprecedented consultation with Canadians but exactly who did the finance minister consult before changing insured mortgage rules? I can tell the House who he did not consult. He did not consult the mortgage or the housing industries.
On February 1 I attended the Standing Committee on Finance to hear witnesses discuss the effects that mortgage rule changes are having on their businesses, their customers, and Canada's many regional housing markets. One point was absolutely clear: none of them had been consulted.
Here are some of the things that the finance committee heard that the minister would have heard had he bothered to ask:
He would have heard from many witnesses that the new rules will reduce competition, leading to higher interest rates and fewer options for Canadian consumers.
He would have heard from Michael Lloyd of DLC Canadian Mortgage Experts that the new rules are, “not even effective in Vancouver and Toronto. You're bludgeoning everyone and it's not fixing a thing.”
He would have heard from Paul Taylor of Mortgage Professionals Canada that, “The spin-off impacts of a reduction in purchasing power for the middle class could have the unintended consequence of creating the scenario that these policies aim to prevent, which is a national debt crisis caused by a significant economic decline.”
He would have heard from Stephen Smith of First National Financial that the insured mortgage stress test will, “reduce the affordability of housing for first-time homebuyers in the softer markets in the country—the Prairies, Quebec, and Atlantic Canada—and will have a minimal effect on the overheated markets in Vancouver and Toronto.”
He would have heard from the President of Canada Guaranty Mortgage Insurance that, “elevated housing market activity in Toronto or Vancouver is not and has not been driven by the first-time homebuyer.”
He would have heard from Bob Finnigan of the Canadian Home Builders' Association that measures like the stress test can, “lock out otherwise qualified homebuyers, they can cause a downward spiral in local economies.”
He would have heard from Sherry Donovan of the Nova Scotia Home Builders' Association that a mortgage lender she knows in Newfoundland estimated that 25% to 30% of its clients would not qualify under the new rules. She would have told him that a Newfoundland homebuilder reported that he went from an average of 50 home sales between October and December each year down to zero sales for the same time period once the new rules came into effect.
The minister could also have heard from the Canadian Homebuilders' Association that the cost of a home in Toronto has increased by $300,000 over the past few years due largely to government regulations, fees, and taxes.
He would have heard that the crisis of affordability in Vancouver and Toronto was not caused by mortgage availability, but by lack of supply, largely due to government regulation.
Did the Minister of Finance intentionally avoid consultations because he did not expect to like the answers that he would get, that he did not want to hear about first-time homebuyers and young families, or about the folly of imposing a uniform national policy on diverse regional markets?
Did the minister not think that the mortgage and housing industries expected to have a say, given that they were consulted on all five of the past mortgage rule changes over the past decade?
For a government supposedly devoted to science and evidence, is it not hypocritical for the Minister of Finance to impose changes to the rules on mortgages without asking any outside experts in the field?
For a government dithering aimlessly on a host of other issues in the name of consultation, it sure rammed through the mortgage rule changes, running over both industry and consumers. The question is why?