Minister of Finance Chrystia Freeland stands during question period in the House of Commons on Parliament Hill in Ottawa, Nov. 28, 2022. (Screenshot/ParlVu)
A motion to question Finance Minister Chrystia Freeland over the coming impacts of interest rates on mortgage renewals was voted down by the House of Commons finance committee on August 11.
“I am very concerned about what is going to happen in the fall,” said Conservative MP Adam Chambers, who sponsored the motion.
“We are not paying close enough attention to what is happening in the mortgage market. I am very concerned about what is going to happen in the fall when people continue to renew mortgages every month at a much, much higher rate.”
Mr. Chamber’s motion asked that Ms. Freeland, who is also the deputy prime minister, appear for questioning before the committee by the end of the month. The motion failed by a 6-4 vote, as first reported by Blacklock’s Reporter, with Liberal and NDP members on the committee opposed.
According to the Bank of Canada’s July 3 “Survey Of Consumer Expectations,” some Canadian homeowners with variable-rate mortgages had already started cutting spending and taking part-time work to save their homes as loans came up for renewal.
“Many low-income households are already buying only necessities, leaving little room for further cuts to their spending,” wrote researchers.
Peter Routledge, Chief Superintendent of Financial Institutions, earlier warned the Senate banking committee that variable rate mortgages with fixed payment schedules were the greatest worry.
“During 2021 and 2022 there was a sizable increase in household mortgages underwritten with that product,” Mr. Routledge testified on May 10.
Conservatives Raise Alarm
Mr. Chambers said that Canadian mortgages were up by around 137 percent, adding, “When people are renewing mortgages, which is happening every month for the last six months, they’ve seen incredible increases.”
According to estimates by Statistics Canada, around $307 billion of $2.1 trillion in mortgage debt in Canada was borrowed at variable rates. Of the $307 billion in variable rate mortgages, a total of $246 billion carry fixed payments.
Conservative MP Brad Redekopp, a former home builder, told the finance committee that housing was a key worry.
“Two-thirds of household spending is related to housing. As the committee talks about inflation and the impact on Canadians, there is nothing more significant than the impact of housing on Canadians’ budgets,” he said.
Liberal MP Julie Dzerowics told the committee the Liberal government was “thinking about this every day,” and would “continue to be open to all the best ideas.”