Proposed bill tightens oversight at CMHC

The federal government has tabled its budget implementation bill that gives Canada’s financial regulator oversight over government-backed mortgage insurance.

The bill changes the governance of Canada Mortgage and Housing Corp. (CMHC) to make the Office of the Superintendent of Financial Institutions the final arbiter in the issuing of such insurance.

The bill also gets the CMHC out of the covered bonds business.

The fixed-income securities, using mortgages as collateral, have allowed banks to cover their risk through a guarantee by CMHC.

Both measures were flagged in the budget, but without specifying the nature of the changes.

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