The financialization of housing in Canada and federally-backed mortgage securitization : public risks, private benefits
University of British Columbia
Doctor of Philosophy - PhD
Over the past 20 years, the primary tool used by the Canadian government to promote homeownership has been the Canada Mortgage Bond. This Bond is created with financial and legal support from the federal government, and sold to private investors, who receive a guarantee on Bond payments backed by public funds. Funds raised by the Bonds are then used by the federal government to purchase mortgage-backed securities from the private banking sector, providing a steady source of funds from which to create more private mortgage debt. The financial instruments used in the program resemble some of those responsible for the 2008 financial crisis. This dissertation investigates this Bond program, outlining its history and legal structure, and exploring the risks that it poses to the Canadian public. I reveal that, while the program avoids some of the worst excesses that led to the financial crisis, it still uses some of the tools that were involved. Further, I discuss how the federal government used the program, along with the temporary Insured Mortgage Purchase Program, to delay the financial reckoning that hit many other countries, leaving Canada potentially vulnerable to another crisis. I also examine how the program centres homeownership and the private mortgage system as principal means to provide housing services to Canadians, sidelining other options and contributing to high levels of household debt in Canada.
Attribution-NonCommercial-NoDerivatives 4.0 International
Law, Peter A. Allard School of