Juno News - January 21, 2022


WATCH： Liberals get very upset when Poilievre asks questions about Canada’s housing market


Episode Stats


Length

6 minutes

Words per minute

161.15297

Word count

984

Sentence count

82

Harmful content

Misogyny

1

sentences flagged

Hate speech

1

sentences flagged


Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

In this episode, the committee hears from the head of Canada Mortgage and Housing Corporation (CMHC) about the value of the amount of money the government is on the hook for when it comes to backing up mortgages.

Transcript

Transcript generated with Whisper (turbo).
Misogyny classifications generated with MilaNLProc/bert-base-uncased-ear-misogyny .
Hate speech classifications generated with facebook/roberta-hate-speech-dynabench-r4-target .
00:00:00.000 What is the total dollar value of insurance in force at the CMHC?
00:00:04.500 Just the number, please.
00:00:11.280 So currently, our insurance in force is $404 billion.
00:00:21.500 And then what is the total value of guarantees under the National Housing Act,
00:00:27.680 mortgage-backed securities, and Canada mortgage bonds?
00:00:29.940 The total, please.
00:00:30.760 The total is $460 billion.
00:00:34.020 So if you add those two numbers up, $404 plus $460 billion, I get $864 billion.
00:00:43.840 Is that the total value of the amount of money the government is on the hook for
00:00:49.620 when it comes to backing up mortgages?
00:00:53.120 So thank you, Chair.
00:00:55.520 And just in response to Mr. Polio's question, the reason I hesitated when he first asked
00:01:01.180 the question is...
00:01:02.160 Right.
00:01:02.420 We don't have a lot of time.
00:01:04.240 I know those two numbers, but there's duplication because some of the mortgages are in the
00:01:08.860 spurtization number.
00:01:09.640 I know that.
00:01:09.880 I know that, Ms. Powers.
00:01:11.040 But what I'm asking for, what is the total number?
00:01:12.880 And what I did ask you for the first time is, what is the total number when you remove
00:01:16.040 the duplication?
00:01:19.320 So I don't have that number on hand.
00:01:20.920 That is very disappointing because we're talking about hundreds of billions of dollars
00:01:26.580 of contingent liability.
00:01:28.980 Point of order?
00:01:29.480 Point of order?
00:01:29.520 Point of order?
00:01:30.240 Yes.
00:01:30.560 Point of order?
00:01:30.800 Point of order?
00:01:31.240 This way of questioning, to me, make me uncomfortable in front of our witness.
00:01:38.040 I'd like Mr. Polio to be a tiny bit more respectful towards our witness, please.
00:01:44.660 We have talked about respect and decorum, Mr. Polio, and just crosstalk, so for the interpreter's 0.99
00:01:49.780 sake.
00:01:50.180 So let's try to just stop that.
00:01:52.080 That'd be great.
00:01:52.720 Thank you.
00:01:53.040 Well, it makes me uncomfortable that we have hundreds of billions of dollars of unknown
00:01:57.980 contingent liabilities.
00:02:00.140 Ms. Romy, if people do default on their mortgages, your corporation then pays the default loss
00:02:06.380 to the bank, and taxpayers could be on the hook for that money.
00:02:09.740 And the fact that you don't know the total amount of guarantees that your government, that
00:02:14.520 your organization is offering on behalf of taxpayers to our banks is problematic.
00:02:18.500 I'll explain why.
00:02:19.760 If our housing prices simply went back to the level they were at in 2020, that would
00:02:26.440 be nearly a 25% reduction in house prices.
00:02:31.820 And if people went defaulted on those houses, many would be underwater.
00:02:37.320 So taxpayers would then have to pay for the default loss.
00:02:40.400 And I would expect that the head of the corporation that is managing these liabilities and this risk
00:02:46.540 for taxpayers would know the number and have them at fingertip.
00:02:50.420 And I want to go to Mr.
00:02:51.780 Rutledge now to further talk about the risk.
00:02:55.800 What percentage of new mortgages in last year were variable rate?
00:03:03.340 Roughly 51% or 52%.
00:03:05.960 That's an unusually high share, isn't it?
00:03:08.080 It is unusually high, and it just…
00:03:11.300 So when rates rise, those people are immediately going to have higher payments, aren't they?
00:03:16.000 Mr. Chair, you're right.
00:03:17.580 That is a correct statement.
00:03:18.880 And what percentage of households who've got mortgages in the last year have 5% down?
00:03:30.560 What percent of mortgages, Mr. Chair, have 5% down?
00:03:34.980 Yeah, a down payment of 5%.
00:03:35.760 I would have to look into that and come back to the committee, and I will do so.
00:03:42.480 And when you do make a 5% down payment, you have to pay mortgage insurance to CMHC or the
00:03:48.380 other providers, and that is tacked on to the value of the mortgage, isn't it?
00:03:53.740 Typically, yes.
00:03:54.800 Yes.
00:03:55.100 So for a 5% down, you have to pay 4% in mortgage insurance fees, which means that once you subtract
00:04:04.420 the mortgage insurance from your down payment, you actually only have 1% net equity in your
00:04:09.660 house then, don't you?
00:04:10.420 All else equal, everyone's different, and I wouldn't make a broad statement.
00:04:16.260 So if someone's got...
00:04:16.880 Point of order, Mr. Chair, point of order, Mr. Chair.
00:04:18.880 Point of order, Mr. Chair.
00:04:19.880 Point of order.
00:04:20.880 I understand why the Liberals don't want these questions asked.
00:04:22.100 Point of order, point of order.
00:04:23.040 No, not at all.
00:04:24.040 Point of order, Mr. Chair, I can understand why these Liberals don't want these questions asked.
00:04:28.820 There's a point of order, Mr. Polyev.
00:04:30.360 Yeah, Ms. Zerowicz.
00:04:31.020 I actually think these questions are very important, but I also think the answers are
00:04:34.320 very important, and I feel like Mr. Rutledge isn't allowed to actually fully answer the question,
00:04:39.920 so I would ask that he be allowed to do so.
00:04:43.380 I want to...
00:04:44.380 I did, I have been taking timings here, and Mr. Polyev had 14 seconds, or the last one,
00:04:51.560 seven seconds, and he cut into Mr. Rutledge, who had one second and 0.41 to answer.
00:05:00.020 So, Mr. Polyev, equal time, please, for the witnesses to answer those questions.
00:05:04.140 Fair point.
00:05:04.780 I do want to thank Mr. Rutledge, because he has actually been offering direct answers to
00:05:08.360 the questions, and so if you've ultimately got 1% net equity in your house, and house
00:05:14.900 prices go back just to 2020 levels, so we're just talking going back to where they were
00:05:19.020 a couple of years ago, and they've dropped by 25% then.
00:05:23.400 You're 24 percentage points underwater in your mortgage.
00:05:27.620 Now, if you can't make your mortgage payments because you're on a variable rate, you've just
00:05:31.340 acknowledged that half of new mortgages are variable, and you default, then you hand your
00:05:36.840 house over to the bank in a 24% loss position, and the bank hends the bill over to Ms. Bowers 0.80
00:05:44.660 over at CMHC, who then passes it on to taxpayers in the form of mortgage insurance payment.
00:05:51.100 That is the risk that we're facing now, and I want to know what immediate action, Mr.
00:05:58.320 Rutledge, you're taking to address the high level of variable rate mortgages.
00:06:03.040 We have gone well over, we have gone well over your time, Mr. Polyev.
00:06:06.300 Thank you.