Peter Routledge at House of Commons Standing Committee on Finance, Opening Remarks

Speech - Ottawa -

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Mr. Chair and committee members,

Thank you for inviting me back in support of your study of the public policy decisions and market forces that have led to increases in the cost of buying or renting a home in Canada.

Given we only have an hour, I will make only a brief opening statement so that I can answer more questions from committee members.

As outlined in our recently published Annual Risk Outlook, we remain intently focused on the key risks facing the Canadian financial system including real estate secured lending and mortgage risks, wholesale credit risks, funding and liquidity risks, and integrity and security risks related to the geopolitical environment.

With respect the topic under investigation by this committee, I note that higher mortgage payments are taking up a larger part of some households’ income, leading to more borrowers finding it difficult to pay their other loans and debts. We expect rising debt service costs to be a key risk for financial institutions and their customers for the next two years. Having said that, I note that mortgage and household credit quality remains high by historic standards.

Committee members, we, along with our federal partners, want Canadians to access and maintain mortgages throughout the ups and downs of market cycles.

And part of my role [as Superintendent of Financial Institutions] is to ensure that lenders exercise prudence in underwriting mortgages, and sound risk management throughout the lifecycle of those loans.

We believe OSFI’s prudential rules for mortgage lending foster a safe, stable financial system and help keep Canadians in their homes over the long-term.

It’s our job to make sure that lenders remain resilient while adapting to evolving risks in financial markets.

And with that, I will be pleased to answer your questions.