CP24 - Toronto News | Breaking News Headlines | Weather, Traffic, Sports
Scheer pledges to allow longer mortgages, remove 'stress test' for renewals
Kelly Geraldine Malone, The Canadian Press
Published Monday, September 23, 2019 10:31AM EDT
Last Updated Monday, September 23, 2019 12:17PM EDT
VAUGHAN, Ont. -- Conservative Leader Andrew Scheer laid out a plan this morning he says would make it cheaper for Canadians to buy homes, loosening rules put in place by the former Conservative government during the global financial crisis.
Scheer pledged he'd return to allowing first-time homebuyers to take out 30-year mortgages to help lower monthly payments.
"For millions of Canadians their home is the largest investment they will ever make," Scheer said.
Beginning in 2008, the Harper Conservatives began reducing the maximum mortgage amortization rate for insured mortgages. They started by knocking it down from 40 to 35 years, and in 2011 reduced it to 30 years.
Conservative finance minister Jim Flaherty reduced the maximum amortization period to 25 years the following year. He said at the time that while monthly payments would be higher, it would result in less interest and help people pay off their mortgages faster.
The move at the time was meant to address the growing debt burden on Canadians. A major factor in the panic that locked up financial markets in the late 2000s was mortgages that owners couldn't pay, on properties that were worth less than the loans taken out against them.
When asked why a new Conservative government would now reverse course, Scheer responded the longer mortgage period would allow more people to buy homes. He added that "it is important that we have strong regulations around the financial sector."
Statistics Canada reported in August that the median mortgage debt of Canadian families that have them almost doubled between 1999 and 2016, rising from $91,900 to $180,000 in 2016 dollars.
Scheer also promised to ease what's known as the stress test on mortgages and remove it altogether from mortgage renewals. The test is meant to make sure people taking out mortgages could still afford the payments if interest rates were to rise.
The Liberals brought in the policy last year and it has been criticized by the construction and real-estate industries. Both the Canadian Home Builders' Association and the Canadian Real Estate Association welcomed Scheer's promises Monday.
A Conservative government would also make surplus federal real estate available for development to increase housing supply, and launch an inquiry into money laundering in the real estate sector, Scheer said.
"Justin Trudeau has put the dream of home ownership further out of reach for so many, especially young Canadians," Scheer said. "As prime minister, I will fix his bad policies and work to get more homes on the market to lower the price of housing."
Scheer is campaigning today in the Toronto-area suburb of Vaughan and then moves on to St. Catharines, Ont.
King-Vaughn, which was a new riding in 2015, was won by Liberal Deb Schulte by just over 1,700 votes last election.
Scheer said he is not concerned with polling that shows the Conservatives and Liberals neck and neck in key ridings despite recent controversies around photos and videos of Justin Trudeau wearing black- and brownface.
"We've got campaigns all across the country where two or three years ago people were writing us off," Scheer said.
"We are going to win those seats."
This report by The Canadian Press was first published Sept. 23, 2019.