CMHC CEO's struggles amid the turbulence in the country's real estate markets

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By his own admission, Evan Siddall—who has made numerous waves during his tenure as president and CEO of Canada Mortgage and Housing Corp.—said that he wouldn’t be the obvious first choice for leader of the Crown corporation.
“I was afraid of that when I started,” Siddall said in his June 17 profile published by The Globe and Mail. “First of all I was an investment banker. Secondly, if people saw I’d been involved in the privatization of a major Crown corporation, the employees would say, ‘Oh, here he comes.’”
Having previously made his career on finance and then on government privatization (including the much publicized transfer of CN Rail in the early 90s), he said that his worries on how his new stint would go were quite justified.
Fortunately, these fears do not appear to be coming to pass, as his administration has successfully suppressed various risks in Canadian housing, in particular through recent changes to minimum down payment requirements.
Siddall also oversaw the reduction of the CMHC’s share of the mortgage insurance market from a record-high of 90 per cent to just a little over 50 per cent, with an end goal of lower than 40 per cent. Currently, the organization reaps annual profits of $1.5 billion to $2 billion.
Nearly three years of trying to put out the fires caused by the red-hot real estate markets lent Siddall a new perspective on whether they remain sound investments or not.
“You know, I’m not sure they are now in Canada,” he mused. “I’ve never made a lot of money in the housing market, strangely enough, even though my generation has, and I’ve lived in New York and I’ve lived in Toronto.”
The plucky executive has taken into heart the mutterings of Canada being in the middle of its own housing bubble just a few years the last major global meltdown.
“We run a half-trillion dollars of risk, and I don’t want to be the [first] CEO of CMHC who experiences a loss,” he stated.
And the toughest challenge—namely, determining the exact role that increasingly prominent foreign investors play in Canadian housing markets—is yet to come.
“To the extent that more and more of that is non-Canadians, then the assumptions about how that model works are a little bit wrong – or maybe a lot wrong,” Siddall, himself a child of an immigrant, said. “[On the other hand,] we get close to dangerous territory if we start discriminating based on people’s ethnicity or nationality. Some of the subtext here is that, which is very un-Canadian.”

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  • Crony capitalism on 2016-07-04 6:19:33 PM

    When private banks issuing sub-prime mortgages, house flippers and speculators profit on the way up while taxpayers are forced to pay for mortgage defaults via CMHC & Genworth on the way down, that is the definition of moral hazard. A privatization of profits and a socialization of debts.

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