CMHC to sell "socially responsible" mortgage bonds

CMHC to sell "socially responsible" mortgage bonds

CMHC to sell "socially responsible" mortgage bonds

The Canada Mortgage and Housing Corporation has announced that it is working on a new set of guidelines that will allow it to sell “socially responsible” mortgage bonds.

The news came in the wake of the federal government’s new legislation that established pollution reduction targets for Canada, with the goal of achieving net-zero emissions by 2050.

CMHC currently has more than $190 billion of mortgage bonds outstanding.

David Ayre, treasurer at the Crown corporation, said that sustainable securities might include “affordability-linked mortgages.” Also under consideration are those linked with green initiatives such as low-carbon homes and energy-efficiency projects.

“We are actively working with our industry partners,” Ayre told BNN Bloomberg via email.

Ultimately, the initiative will place Canada in the ranks of nations that are building their post-pandemic recovery strategies around the stewardship of the environment, CMHC said.

Ayre said the planned sustainability framework will fall under the aegis of the National Housing Act Mortgage-Backed Securities program and its Canada Mortgage Bond program.

A similar strategy is being considered by the Bank of Canada, Bloomberg reported. The central bank is currently gauging dealers’ and investors’ interest in potential environmentally-friendly bonds.

Earlier this year, RioCan launched a green bond framework meant to provide transparency in its green bond issuance, making it the first real estate investment trust in Canada to do so. Net proceeds from the issuances were slated for financing eligible projects like green buildings and renewable-energy investments.