MNI POLICY: Canada Housing Agency Signals It May Need Bailout

By Greg Quinn

     OTTAWA (MNI) - Canada's federal housing agency signaled it may need a

government bailout as the Covid-19 pandemic triggers a surge in unemployment and

mortgage insurance claims, a scenario it long claimed was nearly impossible.

     Canada Mortgage and Housing's annual report published Tuesday said

"increases in insurance claims losses may occur, however we are currently unable

to estimate the potential impact on our financial results or condition."

     "In the event our capital position may be impacted, under the Capital and

Dividend Policy Framework for Financial Crown Corporations, the Government would

stand prepared to inject capital into CMHC should additional capital be needed

to deliver on our public policy mandate," the report said.

     The agency may also be asked by the government to take on even more risk to

stabilize housing markets, CMHC said. "There can be no assurance of the impact

or magnitude of these events on our future financial results."

     The Ottawa-based agency is the main provider of mortgage insurance in

Canada and also takes the lead at packaging mortgages into pools that are turned

into bonds. 

--MNI Ottawa Bureau; +1 613-314-9647; email: greg.quinn@marketnews.com

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