CMHC shrugs off 'bubble' talk, defends role in debt financing
Tue, 05/08/2012 - 19:05 EDT - Financial Post
Analysis: Canada’s housing agency issued an annual report Tuesday that reads like a defence of its business practices, and says despite concerns about the possibility of an overheated housing sector, there was no sign of a bubble
Canada’s latest step to head off the threat of a housing bubble is making bonds sold by the nation’s housing agency increasingly precious.
Canada Mortgage & Housing Corp. said June 6 it will no longer insure financing for condominiums after other steps to cool the housing market. Lower issuance and an end to a six-month rally in government bonds means relative yields for CMHC debt may narrow by five basis points by the end of the year, said Andrew Kelvin, senior fixed-income strategist at Toronto- Dominon Bank’s TD Securities unit.
One major factor behind Canadian banks being the envy of the financial world is that they get so much help from the federal government.
But there may be strings attached to that security — one analyst is predicting that the big banks could actually get hit with the bill in the unlikely event that Canada Mortgage and Housing Corp. — which insures about $560-billion worth of the country’s mortgages — ever needs to be bailed out.
OTTAWA, Ont. — Canada Mortgage and Housing Corp. president and CEO Karen Kinsley is stepping down after a quarter century with the provider of mortgage loan insurance.
Kinsley announced the move in what she described as her 10th and final message for CMHC’s annual report and at a time that Ottawa has been moving to reduce taxpayer exposure to housing market debt.
“CMHC has been my home away from home for 25 years and I cannot adequately express how proud I am of our achievements,” Kinsley wrote.
OTTAWA — Despite aggressive moves by the federal government to limit consumers’ exposure to an overheated housing sector, the Organization for Economic Development and Cooperation is warning Ottawa that even tougher measures are needed to protect taxpayers — in particular, reducing the government’s share of the mortgage-insurance market and transferring more of the risk to the private sector.
Canada Mortgage and Housing Corp., the country’s national housing agency, is finally on the path to being operated like a significant financial player which it has morphed into during the past decade.
A new chairman of the board, a soon-to-be unveiled chief executive and a new reporting structure that will overhaul its operations are the tangible indications of the fundamental changes playing out behind closed doors at the Crown corporation that have been set in motion by the federal government.
Canadian Pacific Railway Ltd. overcame wintry weather and a brief strike in the first quarter to report the best operating ratio in company history — and CEO Hunter Harrison says there’s still plenty of room for improvement.
CP’s operating ratio — a key measure of efficiency, in which a lower number is better — fell nearly nine percentage points to 63.2 per cent, a number Harrison called “staggering.”
“I don’t think any railroad has ever achieved an operating ratio of that level in the first quarter,” Harrison said on a conference call Tuesday.
Larry Smith delivers his warning in the kind of the gruff, no-nonsense tone you might expect from a guy who’s seen it all before and said everything he thought he could about the housing market in years past, back when people might have listened.
OTTAWA • With a long learning curve ahead of him, Stephen Poloz will need to turn to the Bank of Canada’s No. 2 policymaker for support when he takes the helm in June.
But will senior deputy governor Tiff Macklem, snubbed by the institution he so dearly wanted to lead, be around much longer to lend a hand?
Mr. Poloz, 57, was named Thursday as the next central bank governor, replacing Mark Carney who is leaving to head the Bank of England.
Most summers, federal Finance Minister Jim Flaherty gathers with a group of CEOs, academics and policy wonks in the quiet Quebec village of Wakefield. Two years ago, Robert P. Kelly, the newly minted chairman of the Canada Mortgage and Housing Corp., was among the 25 invitees who attended the August, 2011 retreat. At the time, the 59-year-old Haligonian inhabited a corner office on Wall Street as chief executive officer of The Bank of New York Mellon, the fifth largest in the U.S.
Former Wall Street banker Robert P. Kelly has been appointed chair of the Canada Mortgage and Housing Corporation (CMHC) board of directors. Kelly, who is also a former executive of Toronto Dominion Bank, assumes his role at the helm of the 10-member board immediately for a five-year term.