CMHC, worried about excessive household debt, wanted tighter mortgage rules for competitors
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Siddall declined to elaborate on his conversations with government officials about an industry-wide tightening that also would have included CMHC competitors Genworth MI Canada Inc. and Canada Guaranty Mortgage Insurance Co. Discussions between the CEO of CMHC and the minister of finance must be kept confidential, he said.
“I’m not saying whether I had that conversation with the minister,” Siddall said. “I had it with some colleagues in the department of finance.”
For the same legal and governance reasons, Siddall also declined to say whether he has since reached out to Bill Morneau’s successor as finance minister, Chrystia Freeland, who took over the job last month.
We didn’t want to participate in lending or insuring lending that we thought was an inappropriate drag on the economy
Evan Siddall, CMHC CEO
“Certainly, hypothetically, the Department of Finance could look at (broadening the policy),” he said, adding he is certain the government is tracking the impact on the market of the changes made by CMHC.
“If there’s significant problems — and I should say we have not seen that — then they could act in the future,” he said.
Siddall said there has been reduced activity at CMHC since July, but not as steep as anticipated.
“When economic conditions get sketchy, as they are now, people tend to self-regulate and weaker borrowers may be less likely to present themselves in 2020 than they were in 2019,” he said.
“The impact on us — we expected to be 20 or 30 per cent — and it hasn’t been quite that bad. But it’s still early.”
In a private letter Siddall wrote to major lenders in August, which subsequently became public, he expressed concern that private-sector mortgage insurers might try to take a greater share of the lenders’ less-risky business to offset the riskier loans they were still willing to take, “undermining CMHC’s market presence unnecessarily.”
