Is the CMHC Canada’s Fannie Mae?
Fannie Mae and Freddie Mac, the two U.S. federal agencies that underpin most of America’s mortgage market, are often blamed for inflating the country’s real estate bubble and precipitating the financial crisis. But what about their Canadian counterpart, the Canada Mortgage and Housing Corporation (CMHC)? Is it putting Canada on the same path as the United States?
Ian Lee, Professor at the Sprott School of Business at Carleton University, doesn’t think so.
“There are similarities, but there are significant differences,” he tells BNN.
But Lee does believe that CMHC’s time has come to an end.
“It was set up in 1946…we are not in 1946, we are in 2011 and we have a very mature financial services system, very strong, well-managed and well-supervised insurance system,” he says.
“There is no justification for CMHC to be in the private sector with a 70 percent market share…what we need to do is wind it back if not privatize it completely.”