The Canada Mortgage and Housing Corporation is suitably equipped to handle various extreme scenarios including anti-globalization, earthquakes, and a sharp decline in oil prices.
Its mortgage loan insurance arm can also withstand a U.S.-style housing correction.
These are according to the results of the corporation’s stress testing of its own capital levels, as mandated by the Office of the Superintendent of Financial Institutions.
“CMHC has always been and continues to be a stabilizing force in Canada’s housing system. As a responsible risk manager, we seek out extreme, almost unimaginable situations and ask ourselves ‘what if?’ That's the goal of our stress testing – to measure how we would stand up to these unlikely shocks,” according to Romy Bowers, Chief Risk Officer with the CMHC.
“In all cases, this year’s stress testing shows we are well capitalized to handle these very severe situations.”
However, the Crown corporation emphasized that “none of the scenarios tested are a prediction or a forecast.”
The full report on the results of the stress test can be viewed here
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