Finance Minister Bill Morneau says the federal government has no plans to impose Canada’s mortgage stress test on private lenders.
Contrary to recent reports from Reuters, Morneau told Ottawa reporters “I’m not currently considering any stress tests on private mortgage lenders.”
Morneau went on to say, “we’re always looking at the entire mortgage space to make sure we have a system that is providing the adequate protections for Canadians. That means we need to think about obviously the space that we are directly regulating and what our regulations do in terms of impacts on other parts of the provision of that sort of credit.”
Currently, private lenders are regulated by provinces. In order for the stress test to be imposed on private lenders, they would need to fall under federal regulation.
Canada’s mortgage stress test was introduced in January 2018. The Liberal government introduced the test as a means to help cool hot real estate markets in Toronto and Vancouver.
The stress test kept 100,000 buyers from qualifying for a mortgage at Canada’s big banks. It also led to a surge in privately financed homes.