Whoweare

MortgageProfessionalsCanadaisanindustryassociationwhosemembersincludemortgagebrokers,mortgagelenders,
mortgageinsurersandindustryserviceproviders.Wehaveapproximately11,500individualmembersacrossCanada.
Themortgagebrokerchanneloriginatesapproximately33%ofallmortgagesinCanadaandapproximately50%of
mortgagesforfirsttimehomebuyers.Thisrepresentsapproximately$80billiondollarsineconomicactivity.

Concerns/Considerations

Canadianselectedyourgovernmentonastrongmandatetogrowtheeconomyforthemiddleclass.Supportformiddle
classhomeownershipisanimportantwayforyoutoachievemiddleclassgrowth.Infact,your2015platform
recognizedthisincommittingtoconsideringallpolicytoolsthatcouldkeephomeownershipwithinreachformore
Canadians(LiberalPlatform,2015,page7,8).Wewouldlikeyoutohonourthatcommitmentinsteadofmakinghome
ownershipmoredifficultandfurtheroutofreachformoremiddleclassCanadians.
WeareconcernedwiththenegativeeconomicimpactthatthesechangeswillhaveonhousingactivityinCanada.We
arealsoveryconcernedwiththeadditionalcoststhatthesechangeswillplaceontheCanadianmiddleclassbywayof
higherinterestratesandreducedpurchasingpower.Wehavealreadyseenbanksincreasetheirmortgageprimeratesin
partbecauseofthesechanges,whichwillcostCanadiansthousandsmoreoverthecourseoftheirmortgageterm.
FurthertothistheCEOofRBCrecentlysaidtoReutersthatthemortgageruleschangeswillimpactfundingforsome
smallermortgagelendersandRBCcouldbenefit.Thereisarealperceptionthatthesechangesaretothebenefitofbig
banksattheexpenseofsmallerlenders.
Ourmembershiphasbeenvocalwiththeirdispleasureregardingtheimpactsthatthesechangesarehaving,especially
outsideoftheTorontoandVancouvermarkets.ThereisarealandgrowingresentmentthattheactivityinTorontoand
Vancouverisnegativelyandunfairlyimpactingthoseintherestofthecountry.Webelievemovingaheadwitharisk
sharingprovisionwillfurtherthedividebetweenruralandurbanCanada.
TheCanadianeconomyhasseenonlymodestgrowthin2016,especiallyforthemiddleclass,andthehousingsectoris
oneofthefewstrongperformersthathasbeendrivingthisgrowth.Butitisnotjustindustryarguingthis,theBankof
CanadanotesthatthenewrulesthatarebeingimposingwillreducegrowthintheCanadianeconomy,whichwillhurt
themiddleclass.

Whatweareaskingthegovernmenttoconsider:

1. ThatinlightofallofthechangesthathavebeenmaderecentlyandtheuncertaintythattheAmericanelection
hasbroughtthatthegovernmentslowdownandhitpauseonthemeasuresyettobeimplemented.Webelieve
itprudentforthegovernmenttoexaminewhetherthealreadyimplementedchangeswillhavetheintended
policyimpactandthatfurtheractionposesasignificantriskofoveraction.
2. ThatthegovernmentadjusttheNovember30thchangetoallowforrefinancestobeincludedinportfolio
insurance.If80%LTVisunpalatable,pleaseconsiderreducingthethresholdto75%or70%ratherthan
removingtheseproductseligibilityaltogether
3. ThatthegovernmentdecouplethestresstestratefromthepostedBankofCanadarate.Instead,setthestress
testbasedonamarketrate,eitherbylookingattheCanadiantenyearbondyieldsorhavingtheBankof
Canadasetaratethatisindependentoftheaverageofthebankspostedrates.
4. Forthesakeofensuringcompetitionismaintainedinasfairamanneraspossible,OSFIshouldrequirelendersit
regulatestoalsoqualifyborrowersatthestresstestrate.
5. Wewillbepresentingaseparateresponsetotherisksharingwhitepaperbutsimply,weaskthatifsucha
mechanismistobeintroduced,considerationbegiventominimizethepotentialimpacttothecostofcapitalin
themarketplace.