The Federal Conservative Party of Canada's Deputy Shadow Minister for Finance has proposed creating a subcommittee to study B-20’s impact in a bid to have it overturned.
According to MP Tom Kmiec, the Liberal Party acted callously by subjecting Canadians to the mortgage stress test.
“The new stress test is going to block up to 60,000 Canadians from being able to buy a home,” Kmiec told MortgageBrokerNews.ca. “About 100,000 Canadians will probably fail the stress test and won’t be approved to borrow from a federally-regulated lender and that will push them to the unregulated lenders. We know from a CIBC Capital Market report that 47% of all mortgages need to be refinanced in 2018. In the year they knew there would be so many people refinancing, they still imposed the stress test. That was irresponsible and unfair.”
This is the second time Kmiec has proposed studying the mortgage rules after the first motion was voted down, however, he’s willing to play hardball this time.
“I will not approve travel of the committee until such time as we approve a study on mortgages,” said Kmiec. “I’m being reasonable—I’m willing to make amendments to my motion, I want to be collaborative, and that’s why I’m suggesting we make a subcommittee. I think it’s very reasonable. A home, whether it’s a townhouse, a condo or a detached house, is the most important financial decision a Canadian will make, and likely the biggest financial asset they’ll ever purchase. Therefore, it’s totally reasonable to look at this and I’m going to keep pressing.”
Kmiec says that his constituency in Calgary Shepard is replete with homeowners unable to requalify and who are stuck with lenders pushing 100 basis point increases. None of their stories surprise him, though.
“It’s important for the committee to look at the stress test because a report of theirs from a few years ago said the government should help first-time homebuyers and not introduce one-size-fits-all policy.
“If the problem is with indebtedness of Canadians, why are they making it more difficult for them to keep the homes that they’re in, especially for high-ratio mortgages, which also face the stress test. Those people put down more than 20% on their homes, but now the government is making it more expensive for them to carry their mortgages. That’s not just unjust and unfair—that’s bad policy making.”
Mortgage Outlet’s Principal Broker Shawn Stillman doesn’t believe Kmiec will be successful in imploring the Liberals to study the mortgage rules simply because it’s Politics 101.
“It’s unlikely he’ll be successful because government doesn’t like giving any credence to the opposition,” said Stillman. “They could have the best answer but they’ll never say ‘You’re right.’ If they believed it was an issue, they’d say ‘no’ to his suggestion and bring up their own motion a few weeks later.”
Also unlikely, he added.
“I truly believe the Liberal government doesn’t believe it’s an issue. They don’t see any real downside, although I think the Liberal loss in Ontario definitely shows there’s a downside.”
OREA fanning the flames of housing market fears – TREB
GTA residents grumble loudly ahead of provincial election