Government of Canada announces measures to support continued lending to Canadian consumers and businesses
The Government of Canada, through Canada Mortgage and Housing Corporation (CMHC), is taking action to support Canadian individuals and businesses facing financial hardship as a result of the global COVID-19 virus pandemic.
The government is launching a revised Insured Mortgage Purchase Program (IMPP) that will purchase up to $50 billion of insured mortgage pools through CMHC.
“These events remind us all how crucial it is to have a safe and affordable place to live. CMHC exists in part to buffer the effects of events such as the COVID-19 virus pandemic, which affect the health and stability of Canada’s financial system. This is what we do. We are part of a federal team that is working hard together to ease the impacts on Canadians,” Evan Siddall, President and CEO.
According to the CMHC, this action will provide stable funding to banks and mortgage lenders in order to ensure continued lending to Canadian consumers and businesses.
As insured mortgage pools in Canada already carry Government of Canada backing, there is no additional risk to taxpayers. These purchased insured mortgage pools will earn a rate of return for the government that is above its own cost of borrowing.
The Bank of Canada has also announced it will adjust its market liquidity operations to maintain market functioning and credit availability during the current period of uncertainty in which conditions are evolving rapidly.