Van den Berg made the comments while testifying before the Standing Committee on Finance Thursday, where she commended the government’s recent actions, including extending amortization periods for first-time homebuyers and raising the insured mortgage ceiling to $1.5 million.
“We commend the Government for implementing these changes, however, there are still critical areas that need further attention,” van den Berg said.
When asked whether she believed the dream of homeownership was “dead” for many middle-class Canadians, as mortgage expert Ron Butler had suggested in his own testimony earlier in the week, van den Berg acknowledged the serious challenges facing Canadians but struck a more hopeful tone.
“Housing affordability remains the most critical financial challenge facing Canadian households today,” she said.
She noted that housing costs continue to outpace incomes, particularly in major urban centres like Toronto and Vancouver, where many families are spending as much as 84% and 106% of their income on housing. “It’s very much a national crisis and requires a coordinated effort across all levels of government.”
However, van den Berg stressed that while recent reforms are a positive step forward, there is still more that can be done to “ensure access to homeownership [and] that the dream doesn’t die.“
“It’s not just an economic issue, but also a matter of national well-being, which affects the social fabric of our communities,” she said.
The push for a National Housing Roundtable
Van den Berg pointed to two key areas that require immediate attention: extending 30-year amortization to all homebuyers and not just first-time buyers, and one of MPC’s key policy asks, the establishment of a National Housing Roundtable.
“This roundtable will bring together all levels of government, industry leaders and civil society to engage in ongoing dialog and develop long term solutions to the housing affordability crisis,” van den Berg said. “While provincial and municipal governments have made commendable efforts to address housing barriers, a coordinated federal effort is still needed.”
She added that such a permanent forum for collaboration would “ensure that Canada’s housing challenges are addressed holistically and would demonstrate the government’s continued commitment to solving this crisis.”
Additionally, the association is urging the government to combine the Home Buyers’ Plan with the First-Time Home Savings Account to simplify the process for first-time buyers and help them better manage their savings for down payments.
Pressing the need for digital income verification
Another key recommendation from van den Berg’s testimony was the call for a digital income verification tool, which she said would significantly streamline the mortgage application process and help reduce fraud.
“Currently, mortgage applicants must provide income verification through outdated manual methods, which are both time consuming and susceptible to fraud,” van den Berg explained. She called for a secure digital tool through the Canada Revenue Agency (CRA) that would allow trusted third parties in the mortgage industry to instantly verify income, thereby reducing fraud and improving efficiency for lenders and homebuyers alike.
“Mortgage fraud is on the rise, and it has been for a while,” she said. “A digital income verification tool is critical to combat that while maintaining data privacy.”
Equifax Canada reports that mortgage fraud is occurring 30% more frequently compared to pre-pandemic levels, while the Canadian Anti-Fraud Centre reports that $569 million was lost through fraud in 2023.
On Tuesday, mortgage expert Ron Butler of Butler Mortgage, in his own testimony before the committee, expressed disappointment over the slow progress in implementing digital income verification.
The CRA had initially committed to exploring a digital income verification tool as part of measures in the federal budget in the spring, but there has been little movement on the issue since the announcement.
Butler highlighted the ongoing delays in his testimony: “Yet nothing, and nothing until possibly next year,” he remarked, expressing frustration over the lack of timely action on a solution that could reduce mortgage fraud and streamline the homebuying process.
“It is my fondest hope that we can finally end this problem of mortgage fraud through false income documents in Canada,” he said. “Because even though it’s not rampant, even a thousand is too much. And believe me, there’s more than a thousand (cases of mortgage fraud).”
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Last modified: October 28, 2024