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Fiscal Analysis of Proposed Premium Reduction for Mortgage Insurance

PDF
Published on December 17, 2021 PDF

This note provides fiscal analysis of the Government’s proposal to reduce mortgage insurance premiums collected by the Canada Mortgage and Housing Corporation (CMHC).


Communications

Quote

  • We estimate that the 25% decrease in CMHC’s mortgage insurance premiums will result in a net cost of $1.4 billion to the government over five years.

Yves Giroux
Parliamentary Budget Officer

News Release

{"id":23,"created_at":"2021-12-13T11:32:34-05:00","updated_at":"2021-12-17T08:59:08-05:00","slug":"cmhc-mortgage-insurance-reduction-will-cost-over-five-fiscal-years-la-reduction-des-primes-dassurance-pret-hypothecaire-de-la-schl-coutera-sur-cinq-exercices","title_en":"CMHC mortgage insurance reduction will cost $1.4 billion over five fiscal years","title_fr":"La r\u00e9duction des primes d\u2019assurance pr\u00eat hypoth\u00e9caire de la SCHL co\u00fbtera 1,4 milliard de dollars sur cinq exercices","body_en":"The Parliamentary Budget Officer (PBO) today released his fiscal analysis of the Government\u2019s proposal to reduce mortgage insurance premiums charged by the Canada Mortgage and Housing Corporation (CMHC).\n \n\u201cWe estimate that the 25% decrease in CMHC\u2019s mortgage insurance premiums will result in a net cost of $1.4 billion to the government over five years\u201d, says Yves Giroux, PBO. \n\nPBO also estimates that Canadian households will have a one-time average savings of $5,341 in 2022-2023.\n\nIf implemented, it is also expected that private sector insurers will also reduce their premiums to closely match those of the CMHC, given the structure of the mortgage insurance market.","body_fr":"Le directeur parlementaire du budget (DPB) a publi\u00e9 aujourd\u2019hui son analyse budg\u00e9taire de la proposition du gouvernement de r\u00e9duire les primes d\u2019assurance pr\u00eat hypoth\u00e9caire appliqu\u00e9es par la Soci\u00e9t\u00e9 canadienne d\u2019hypoth\u00e8ques et de logement (SCHL). \n\n\u00ab Nous estimons que la r\u00e9duction de 25 % des primes d\u2019assurance pr\u00eat hypoth\u00e9caire de la SCHL aura un co\u00fbt net de 1,4 milliard de dollars pour le gouvernement sur une p\u00e9riode de cinq ans \u00bb, d\u00e9clare Yves Giroux, DPB. \n\nLe DPB estime aussi que les m\u00e9nages canadiens profiteront d\u2019\u00e9conomies ponctuelles moyennes de 5 341 $ en 2022-2023. \n\nSi cette r\u00e9duction est mise en \u0153uvre, on s\u2019attend \u00e0 ce que les assureurs du secteur priv\u00e9 r\u00e9duisent \u00e9galement leurs primes d\u2019assurance pr\u00eat hypoth\u00e9caire en raison de la structure de ce march\u00e9.","release_date":"2021-12-17T09:00:00-05:00","is_published":"2021-12-17T08:59:08-05:00","internal_id":"COM-2122-023","permalinks":{"en":{"website":"https:\/\/www.pbo-dpb.ca\/en\/blog\/news-releases--communiques-de-presse\/cmhc-mortgage-insurance-reduction-will-cost-over-five-fiscal-years-la-reduction-des-primes-dassurance-pret-hypothecaire-de-la-schl-coutera-sur-cinq-exercices"},"fr":{"website":"https:\/\/www.pbo-dpb.ca\/fr\/blog\/news-releases--communiques-de-presse\/cmhc-mortgage-insurance-reduction-will-cost-over-five-fiscal-years-la-reduction-des-primes-dassurance-pret-hypothecaire-de-la-schl-coutera-sur-cinq-exercices"}},"pivot":{"publication_id":640,"news_release_id":23}}