Canada’s mortgage stress test needs to be revisited, ATB CEO says
The chief executive of Alberta-based bank ATB Financial is calling on the federal government to revisit controversial mortgage rules introduced in January 2018, saying the regulations are holding back some Canadians from buying homes.
Curtis Stange, president and CEO of ATB, said the government needs to look at what’s happening across Canada – and beyond the provinces with higher-growth housing markets.
“We believe the federal government and regulators still need to listen Canadians broadly and continue to look especially at the component of the 200-basis point stress test,” Stange told BNN Bloomberg’s Greg Bonnell Thursday.
“There’s no doubt that the increase in interest rates, on top of the 200-basis point stress test, are making it difficult for some Canadians who would normally be able to get into a home, [to purchase] a home.”
Stange joins a number of realtors and home-builder groups who have urged the government to revisit the B-20 rules in recent months. Economists from Toronto-Dominion Bank and Canadian Imperial Bank of Canada also warned that the policy may be too severe and lead to unintended consequences in the real estate market.
Meanwhile, Alberta’s housing industry is still feeling the effects stemming from the oil price collapse in 2014 and housing conditions have evolved overall across Canada since the new mortgage rules were first introduced, Stange added.
“The conditions simply have changed,” he said.
“Let’s look at the conditions as they change and look at the potential of reducing the size of that stress test … perhaps to something a little bit smaller.”