A sold sign is shown in a housing development in Beckwith, Ont., on Wednesday, Jan. 11, 2018. Canada Mortgage and Housing Corp. is expanding its insured mortgage purchase program to $150 billion.THE CANADIAN PRESS/Sean Kilpatrick
Republished March 26, 2020 - 10:51 AM
Original Publication Date March 26, 2020 - 7:06 AM
OTTAWA - Canada Mortgage and Housing Corp. is expanding its insured mortgage purchase program to $150 billion as part of its response to the COVID-19 crisis.
The move to help bolster the financial system is an increase from an initial plan for $50 billion announced March 16.
The expansion is part of the emergency measures passed by the government to deal with the fallout of the novel coronavirus and the steps taken to slow its spread.
CMHC also announced Thursday that it would suspend its regular dividend that it pays to the federal government.
It said that suspending the dividend allows it to conserve its financial strength to take further action if needed.
"As a key stabilizing component of the Canadian financial system, we will be substantially increasing our appetite for risk as we and other institutions absorb the impacts of these events," the housing agency said in statement.
CMHC has said the insured mortgage pools that it is buying already carry government backing, so there is no additional risk to taxpayers.
Ottawa had a similar program to buy insured mortgages during the 2008-09 financial crisis.
In buying the insured mortgages, CMHC helps provide funding for the banks that they can then use for other loans to help businesses and other borrowers.
This report by The Canadian Press was first published March 26, 2020.
News from © The Canadian Press, 2020