Remarks by the Deputy Prime Minister announcing the boldest mortgage reforms in decades to unlock homeownership for more Canadians

September 16, 2024 – Ottawa, Ontario

Good morning, everyone. Great to be here.

Welcome to the first economic press conference of the season. I will speak about the Canadian economy and the new mortgage rules. Minister Virani will talk about the new framework to protect renters and home buyers. Finally, Minister Boissonnault will speak about what these new mortgage rules will mean for young workers and for families across Canada.

Before diving into the new mortgage rules, I’d just like to say a couple of words about the Canadian economy.

We’ve had some positive news over the past few months. We have now had inflation down within the Bank of Canada’s target range for seven months in a row, and in July, inflation hit a 40-month low. We’ve seen the Bank of Canada lead the G7 in cutting interest rates. Canada has now been the first G7 country to cut interest rates for the first time, the first G7 country to cut interest rates for the second time, and the first G7 country to cut interest rates for the third time. It looks as if a soft landing is in sight.

We’ve now seen wages outpacing inflation for 18 months in a row. That is really important for hard-working Canadians, because it means their paycheques have more purchasing power. And the IMF is predicting that Canada’s GDP will be the fastest growing in the G7 in 2025.

That brings me to my announcement today about mortgages and mortgage rules. For our government, housing is a priority because it’s a priority for Canadians, and that’s why in the budget we put forward the most ambitious plan since the Second World War to build more homes faster. A big part of that plan is to have more purpose-built rentals, to have more affordable housing. Another key element of that plan is ensuring that young Canadians who want to buy a home can do that—that the dream of homeownership remains in reach for our younger generations. And that’s why we’re making some really significant changes today.

First, we are increasing the price cap for insured mortgages from $1 million to $1.5 million, effective December 15^th this year. Why? Because the current $1 million cap dates back to 2012, and there have been big changes in the Canadian economy, the Canadian market. This change allows more Canadians to qualify for a mortgage with a downpayment below 20 per cent.

So, we are raising the level for insured mortgages from $1 million to $1.5 million. The $1 million level was set in 2012. Since then, Canada’s nominal GDP has increased by 65 per cent. It was time to look at that number, and that is a change that is going to have a real impact for thousands, even millions of Canadians. It is going to put the dream of homeownership in reach for more young Canadians.

The second change that we’re making: We’re expanding 30-year amortizations for insured mortgages. In the budget in the spring, we announced that 30-year amortizations would be available for first-time home buyers buying newly built homes, effective August 1^st. Today, we are announcing that 30-year amortizations on insured mortgages will be available for all first-time home buyers. This really is about fairness for every generation. It’s about making that first home more available for young Canadians, for first-time home buyers.

The second change we’re making in the insured market is we’re saying that for all buyers of newly built homes in the insured space, 30-year amortizations will be available. This is really, at heart, a supply side measure. This is about creating more demand for new builds, because we know that crucially, Canada needs to get more homes built faster. In order to get those homes built faster, more people need to be there buying them. That’s what this change is going to permit. Both of those changes are effective December 15^th.

I do want to point out that these measures build on our huge housing plan announced in the budget in the spring. They build on our plan to get 4 million homes built. They build on our tax-free First Home Savings Account. More than 750,000 Canadians—young Canadians, people who don’t have a first home yet—have opened those accounts. We are now taking the next step and making it easier for people who are saving so hard for that downpayment to buy their first home. These measures build on our Canadian Mortgage Charter.

I do want to point out—because over the summer, I talked to a lot of people who are concerned as their mortgages come up for renewal—in the Mortgage Charter, we allowed all holders of insured mortgages to switch lenders at renewal without another mortgage stress test. That’s because we want people at renewal—who are already under a lot of pressure, who are already really concerned—to have maximum flexibility, to have the ability to shop around for the deal that works for them and their family.

We are also today releasing blueprints for the Home Buyers’ Bill of Rights and the Renters’ Bill of Rights, and that is what we’re going to hear from Minister Virani about in a minute.

I just want to highlight that today’s announcement is really important—important for all Canadians. These measures are aimed at building more homes faster across Canada, at creating intergenerational equity, and enabling young Canadians to achieve this Canadian dream and purchase their first home.