A cooling market: February statistics showed a 15.8-per-cent drop in the number of homes changing hands from a year ago.John Lehmann/The Globe and Mail
Jim Flaherty pushed lenders this week not to lower mortgage rates. His actions left many Canadians asking: Who does the Finance Minister think he is? Readers, print and digital, are sharply divided on the answer – and what it says about government's role:
Who the heck does Jim Flaherty think he is? The big brother saving Canadians from themselves? If lenders want to give Canadians a better mortgage deal, why should Mr. Flaherty stick his nose into their affairs?
So much for Stephen Harper and his platform of less government. We don't need papa Flaherty telling us what he thinks is good for us.
Andy Popovic, Fort Macleod, Alta.
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Since Canada Mortgage and Housing Corp. (and by extension the taxpayer) guarantees mortgages, the Finance Minister has every right to intervene. Let lenders forgo CMHC insurance and see what mortgage rate you would get.
Michael Simioni, Montreal
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When banks set rates for highly political things such as mortgages, they do a very detailed risk analysis. Having a Finance Minister who doesn't seem to understand his role is a very large risk, and the cost of that risk will be passed on to consumers.
Alan Partington, Toronto
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The Finance Minister is right to be concerned about rising household debt levels. The 2008 housing and banking crises in the U.S were created by easy credit. The subsequent bailouts of Freddie Mac, Fannie Mae, AIG and innumerable banks cost the U.S. government hundreds of billions of dollars, and put the U.S. economy into a tailspin.
However, by picking on individual lenders that are trying to attract new business, Mr. Flaherty is not going about it the right way. There are other ways that are more in accordance with free-market principles. For example, one area that could be looked at is the maximum amount Canadians can borrow against the value of their homes. This could be reduced to 75 per cent or less.
When mortgages are awarded, lenders consider the maximum percentage of gross household income spent on housing expenses, and to service all household debt, including housing expenses. These figures could be lowered.
Canada weathered the 2008 global financial crisis better than most countries in the industrialized world. We have a strong economy and Mr. Flaherty is right in trying to keep it that way.
Rajesh Phalpher, Oakville, Ont.; Swaroop Rangam, Toronto
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Jim Flaherty is just looking at one side of the mortgage-rate picture – cooling the housing market by warning about new debt loads. The number of people who already have homes and home equity lines of credit (HELOCs) is far greater and they need to start paying down the debt – not merely pay the interest cost. Mortgages pay down principal and interest.
Atiya Ahsan, Mississauga
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Our Finance Minister has embark-ed on a policy of micro-managing mortgage interest rates, in effect asking lenders not to pass on lower borrowing costs to consumers. Surely it is odd that prospective first-time home buyers are expected to subsidize larger profits from our lending institutions.
George Anderson, Mahone Bay, N.S.
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Steve Pomeroy of the Carleton University Centre for Urban Research and Education suggests that Jim Flaherty is living in a glass house with his restrictions on mortgages. Yes – and the rest of us are living in a house of cards.
Richard Harris, Hamilton, Ont.
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Jim Flaherty thinks it is okay to use his office to bully and interfere in the day-to-day operations of Canadian corporations, as long as he is motivated by what he construes as his "concern for the Canadian people." His justification for his actions is as disturbing as the actions themselves.
Peter Kells, Ottawa
If someone can't afford their mortgage in five years, they have the option of selling and perhaps making a little profit. Who is Jim Flaherty to deprive potential home buyers of a great deal?
Karen Hildebrandt, Toronto
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Economists have been predicting a rate increase for more than five years. This hasn't happened; no one can predict when such an increase will occur or what its magnitude it will be. The private sector needs to operate independently from government-imposed mortgage-rate floors, thereby allowing Canadians to keep the incremental monthly payments in their own pockets.
Karen and Dave Levy, North Vancouver
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If Jim Flaherty wants to dictate to a "free" market, why doesn't he tell banks to lower the rates on credit cards and offer higher rates on savings and investments?
Jacques Desjardins, Toronto
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Free market enterprise clearly has a place in our world, but so does a minister being vigilant in his responsibilities. Our banks have weathered the storm relatively well. It is in all of our interests that they continue to do so, mandated by government oversight.
Kevin Stevens, LaBaie, Que.
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The Finance Minister has many tools to limit credit to higher-risk borrowers without forcing us all to pay more. How very un-Conservative of him.
William Chappell, Toronto
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OTHER LETTERS
At aid's helm
John Ibbitson writes that "too many seasonal workers are unable or unwilling to get the training they need for new jobs" (A Cautious Prime Minister Picks His Fights Carefully – March 22). Why are workers "unable"? Do they have a part-time job that brings in money for their families? Would they abandon a sure thing for promises of a possible job? Are they sick or disabled? If someone has a family they may be "unwilling" to move to get training because there are risks involved and children and grandparents to consider.
Barbara Michel, Toronto
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Cautious workers
The Globe lauds the PM for trying to bring aid out of its time warp (Stephen Harper, In Full Flight – editorial, March 22). You also report William Shatner's birthday (A Moment In Time – March 22, 1931).
With Mr. Harper at the helm, we will reverse in time to position economic and foreign policy interests as the main driver for aid. Captain Kirk would have taken us boldly forward based on values that align with well-recognized aid-effectiveness principles, such as responding to locally identified priorities and ownership.
Stephen Free, Kanata, Ont.
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Glass half-empty
I've known for years that pessimism can serve as an enormous help (The Positive Side Of Pessimism – Life & Arts, March 22). When someone asks me whether I view a proverbial glass as half-full or half-empty, I always reply: It depends whether you just poured yourself some – or you just drank it!
Amy Soule, Hamilton, Ont.
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Look to CRTC
Letter writer Sean Kennedy is right to deplore the garbage that masquerades as educational TV, but let's put the blame where it belongs: the CRTC (NG's Appeal – March 20). Commercial licence holders are profit driven; if they can get away with such trash, they will.
The CRTC has an obligation to ensure that a wide range in choice is available on our networks, and it has profoundly failed to do so. The only concern the CRTC apparently has is to extract the maximum amount of licence fees.
Brian Swinney, Burlington, Ont.