Officials in Ottawa discussed forcing private mortgage insurers to tighten eligibility rules, but ultimately balked, leaving Canada Mortgage and Housing Corp. to proceed on its own, the federal housing agency’s leader said.
“We had that conversation and you’ll have to pose the question to (the government) as to why it didn’t happen,” Evan Siddall, CMHC’s chief executive, said in an interview. “The minister of finance could have done it.”
tap here to see other videos from our team.
Siddall’s comments highlight a worry held by some in Ottawa that the return of ultra-low interest rates will stoke another household borrowing frenzy, just as they did a decade ago when central banks dropped interest rates to or near zero to fight off the Great Recession.
Most economists agree that aggressive monetary policy will be needed to recover from the COVID-19-induced recession, but some policy-makers, including Siddall, think regulators should pair lower-for-longer interest rates with tighter lending rules to limit potential credit problems down the road.