CMHC shrugs off 'bubble' talk, defends role in debt financing
Tue, 05/08/2012 - 18:05 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 — Canada Mortgage and Housing Corp. says the pace of housing starts slowed last month compared with April.
The seasonally adjusted annual rate for May came in at 188,570 units for the month, down from 191,388 in April.
The six-month moving average of the seasonally adjusted annual rate was 191,000 in May compared with 194,950 in April.
The pace of urban starts slowed by 2.5 per cent in May to 170,432 units as multiple-unit starts fell 5.7 per cent to 110,834 and single-detached starts increased 4.2 per cent to 59,598.
OTTAWA — Defence Minister Harjit Sajjan has headed off a potentially divisive debate by declaring the Liberal government will not privatize military search and rescue.
Sajjan made the comments Tuesday in response to an NDP question, after the Citizen revealed that the government’s defence review included questions about whether there were “alternatives” to having the military conduct search and rescue missions.
OTTAWA — Demand for condominiums is soaring in big cities like Toronto and Vancouver, prompting some analysts to worry about a potential bubble. At the same time, crude-producing provinces like Alberta are in a slump.
“Housing starts are trending at a four-year low in the Prairies, where low oil prices have weakened consumer confidence,” CMHC Chief Economist Bob Dugan said in a statement.
“At the same time, starts are trending at an eight-year high in British Columbia, as new and resale home inventories remain low,” he added.
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.
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.