Mr. Speaker, in response to part (a) of the question, the government conducted its first purchase of Canada mortgage bonds, or CMBs, on February 14, 2024.
With respect to part (b), to date, the government has purchased $11 billion of Canada mortgage bonds. More details on Canada mortgage bonds purchased by the government are available at the Bank of Canada website at https://www.bankofcanada.ca/markets/canada-mortgage-bonds-government-purchases-and-holdings/.
As of May 31, 2024, the market value of the government’s CMB portfolio was equivalent to $11.1 billion.
Although the government tracks the fair value of its CMB portfolio, CMBs are accounted for at amortized cost, not at their fair value. Consequently, movement in CMB value has no financial impact on the portfolio.
With respect to part (c), the government does not expect any incremental losses on these holdings due to existing federal government guarantees. It does not expect defaults or write offs.
Furthermore, for a variety of reasons, mortgage default rates in Canada have historically been low.
Given all these structures in place, there has not been a default on CMBs since the introduction of the program in 2001.
With respect to part (d), due to the existing guarantee mechanisms in place that protect CMBs against default risk and that significantly mitigate risk, the purchase of CMBs does not increase the government’s risk exposure.