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The Canadian mortgage insurance system is unique:
the government of Canada has a significant explicit exposure to
mortgage finance. Forty-three percent of mortgages (including all
loan-to-value mortgages over 80 percent) are covered by
guarantees backed by the government, leaving Canadian taxpayers
highly vulnerable to this sector of the economy. The Canadian
system also includes an unlevel playing field for mortgage
insurance because it favours the dominant, government-owned
mortgage insurer at the expense of private insurers. This study
recommends that the Canadian government reduce taxpayer
vulnerability, including withdrawing government guarantees from
all mortgage insurers-public and private-and privatizing the
Canada Mortgage and Housing Corporation's mortgage insurance
business.
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