Standing Senate Committee on National Finance (NFFN) (May 28, 2024)
ISSUE: The Canadian Mortgage Charter (Budget 2024)

Key points

Budget 2024 announces that the government is enhancing its Mortgage Charter to provide further support to Canadians facing mortgage hardship on their principal residence.
The government’s new Canadian Mortgage Charter complements FCAC’s existing Mortgage Guideline. They both reinforce the expectation that financial institutions should provide tailored support to consumers with mortgages who are experiencing severe financial stress.
Both the Mortgage Charter and FCAC’s Guideline establish clear expectations for how federally regulated financial institutions should assist Canadians facing financial difficulty on their principal residence mortgage.

1. What is the difference between the Mortgage Charter and the Mortgage Guideline?

The Mortgage Charter builds on FCAC’s Guideline. Both establish clear expectations for how federally regulated financial institutions should assist Canadians facing financial difficulty on their principal residence mortgage.
The Charter and Guideline also underscore the expectation that lenders proactively reach out to borrowers to assist them.
FCAC’s mortgage guidelines provides clarity and additional detail regarding FCAC’s regulatory expectations; whereas the Department of Finance’s Mortgage Charter is broader in scope and includes measures that are not in our guideline.
This includes new measures announced in the budget, such as allowing up to 30-year mortgage amortizations for first-time home buyers purchasing new builds.
The Mortgage Charter is also much broader in scope than FCAC's mortgage guideline, and draws from requirements supervised by OSFI and CMHC, in addition to FCAC.
The Department of Finance is best placed to answer questions on the development of the Charter and its measures.

2. Is the Canadian Mortgage Charter voluntary or mandatory for banks to follow?

FCAC is responsible for monitoring the implementation of the Mortgage Guideline and fully expects that federally regulated financial institutions will adhere to it.
Questions on the Mortgage Charter should be referred to the Department of Finance.