Midway through lunch in downtown Toronto, Evan Siddall offers up an unexpected insight coming from someone who runs a federal housing regulator.
"Houses are a hassle," says the president and CEO of Canada Mortgage and Housing Corp. over mushroom pizza and decaf Americano. Then, catching himself, he demurs: "The head of CMHC shouldn't say that."
Years before finding his way into the public sector, Mr. Siddall was a rising star in the investment banking world with a large home in Toronto, a Muskoka cottage and a winter cabin. These days, the head of Canada's housing agency owns little in the way of real estate.
He and his wife sold their Toronto laneway house last year. Mr. Siddall, 51, rents in Ottawa and usually commutes to meetings in Toronto from his home in Collingwood, Ont., where his wife, fellow former investment banker Garnet Pratt Siddall, now heads craft brewery Side Launch Brewing Co. In fact, Mr. Siddall has chosen the restaurant, Pizzeria Libretto, in part because it serves his wife's beer.
I ask the man in charge of steering Canada's uneven housing market through turbulent economic waters whether he thinks houses are a good financial investment.
"You know, I'm not sure they are now in Canada," he replies. "I've never made a lot of money in the housing market, strangely enough, even though my generation has, and I've lived in New York and I've lived in Toronto."
Fred Lum/The Globe and Mail
Mr. Siddall's opinion seems less surprising if you consider that, since being hired in 2014 to run CMHC, he has been tasked with pouring buckets of ice water on housing markets in B.C.'s Lower Mainland and Southern Ontario that refuse to cool down amid historically low interest rates.
Once an organization that largely toiled in obscurity, CMHC has been thrust into the spotlight by a global financial crisis precipitated in part by "irrational exuberance" about the infallibility of residential real estate prices.
Canada managed to avoid the worst of the meltdown, but now there are mounting concerns that the country is in the midst of its own housing bubble, prompting questions about whether taxpayers are shouldering too much of the risk by backstopping CMHC's mortgage insurance and securitization businesses.
Mr. Siddall is not indifferent to those concerns. "There are things that keep me up at night all the time," he says. "We run a half-trillion dollars of risk, and I don't want to be the [first] CEO of CMHC who experiences a loss."
Mr. Siddall arrived at CMHC after a two-year stint at the Bank of Canada as a special adviser to Mark Carney, a long-time friend. He says he came to the agency without any preconceived notions, though he was attracted by former Conservative finance minister Jim Flaherty's comments that the Crown corporation had grown too grand and needed to be refocused.
While much of the work to reform CMHC predates Mr. Siddall, under his watch the agency has scaled back its mortgage-default insurance business and curbed risks in the housing market, most recently tightening rules by raising minimum down payments.
He has also continued to shrink CMHC's share of the mortgage insurance market, from as high as 90 per cent during the depths of the financial crisis to slightly above 50 per cent today. Two successive hikes in CMHC's mortgage-insurance premiums were aimed at giving the agency's private-sector competitors an advantage.
Mr. Siddall envisions CMHC's market share falling no lower than 40 per cent: Too large a share, he says, and CMHC would have trouble scaling up in a crisis; too small and CMHC might struggle to fulfill its mandate to be a truly national insurer and remain profitable. It makes between $1.5-billion and $2-billion a year in profit.
He has also sought to make CMHC more transparent, publishing a slew of housing market research as well as quarterly updates of its mortgage insurance and securitization businesses.
But of all the changes, Mr. Siddall seems most enthusiastic about orchestrating a major internal shakeup of the organization he says had become overly bureaucratic and reflexively defensive to criticism. Since 2014, CMHC has laid off 200 employees, reassigned 500 others and added staff on its research, policy and risk management side.
The moves were not driven by government cost-cutting measures, he says, but by a need to reassert CMHC's central role in shaping Canada's housing market strategy.
"We had lost our seat at that table from a policy-making point of view," he says. "By thinking more profoundly and deeply about the role we could play as a public-policy tool, we've regained the credibility of having a seat at the table."
As an example, he describes past changes to mortgage insurance rules as having been imposed on CMHC from above, while hikes to minimum down payments and other changes announced in December were more collaborative efforts. "The dialogue has changed," he says.
Still, he sees more work to be done. Mr. Siddall has been a vocal proponent of "risk-sharing" for lenders who rely on CMHC's mortgage insurance. He also thinks the agency may need to do more to reform its portfolio insurance business, which allows lenders to insure "low-ratio" mortgages, those with at least 20 per cent equity.
The program, which exploded in popularity in the aftermath of the financial crisis, has given lenders a taxpayer-subsidized form of cheap financing and, increasingly, a way around regulatory capital requirements by allowing them to hold what regulators consider to be risk-free insured mortgages on their balance sheets.
This year, however, he is spearheading what is likely to be CMHC's most politically sensitive exercise: tackling the issue of foreign investment in Canada's housing market.
Mr. Siddall admits he hasn't worked out his own stance on the contentious issue. On one hand, he's worried about the potential for money laundering through the real estate market and also whether an influx of foreign cash could distort CMHC's economic models, which are premised on the idea that housing markets have historically responded to changes in the local employment, not distant economies.
"To the extent that more and more of that is non-Canadians, then the assumptions about how that model works are a little bit wrong – or maybe a lot wrong," he says. "So that's a big concern of mine."
On the other hand, he considers some of the dialogue around foreign buyers to have elements of xenophobia and nationalism. "We get close to dangerous territory if we start discriminating based on people's ethnicity or nationality," he says. "Some of the subtext here is that, which is very un-Canadian."
Mr. Siddall himself is the child of an immigrant – his father came to Canada from England in 1957. Born in Toronto, he was one of three boys raised in Georgetown, Ont.
By his estimation he has enjoyed a charmed existence. "My life is full of dumb luck, lots of dumb luck," he says. "Look, I was born white, male, Canadian, able-bodied and in full possession of my mental faculties. I could only screw it up."
He attended the University of Guelph, playing football and studying management economics, and later getting a law degree. After school, he joined brokerage Burns Fry, which eventually became BMO Nesbitt Burns, getting his first taste of public-sector life as an adviser on CN Rail's privatization in the early 1990s.
When he joined CMHC nearly 20 years later, he worried his work on a high-profile government privatization might affect his reputation at a time when politicians were musing about privatizing the housing agency itself.
"I was afraid of that when I started," he said. "First of all I was an investment banker. Secondly, if people saw I'd been involved in the privatization of a major Crown corporation, the employees would say, 'Oh, here he comes.'"
(Mr. Siddall calls privatization an "interesting benchmark" but advocates against it for CMHC. "I don't think what we do is privatizatable," he says, "because we're an instrument of public policy.")
His work on CN's public offering got Mr. Siddall noticed by Goldman Sachs, which also worked on the deal. He took a job with the bank in New York, where he met his wife and first crossed paths with Mark Carney. As fellow Canadians, they socialized, chatted policy and briefly shared a client, Ballard Power Systems.
His morning route from his home in Tribeca to Goldman's offices normally took him past the World Trade Center. But thanks to his "dumb luck," Mr. Siddall was at Newark airport waiting for a flight to Montreal when terrorists attacked on Sept. 11, 2001.
Mr. Siddall returned to Canada in 2002, recruited as managing director of the Canadian arm of investment bank Lazard. In yet another instance of impeccable timing, he resigned from Lazard the Friday before Lehman Brothers filed for bankruptcy in 2008, and took a job as a senior executive at Irving Oil, commuting between the company's offices in Toronto and Saint John until his departure in 2010.
That move landed him in the middle of an acrimonious split between Irving family members that culminated in CEO Kenneth Irving leaving the company in 2010. The family's divisions were obvious to senior managers, though Mr. Siddall says the breakup was being done "amicably" and with professionalism: "I just didn't want to get anything on me," he says. "So I left."
It was around that time that he met up with Mr. Carney for a chat at Balzac's, a coffee shop in Toronto's Distillery District. By then, Mr. Carney was Canada's rock-star central banker and was heading up the international Financial Stability Board.
"I said to him, 'So, two years on, what have you big brains done to solve the financial crisis and prevent it happening again?'" Mr. Siddall says. "And Mark in his classic way leans across the table to me and he says: 'We're working on it. What have you done?'"
Mr. Siddall joined the Bank of Canada in early 2012 as a special adviser to Mr. Carney, working on a "bail-in" proposal for major banks.
When Mr. Carney left to run the Bank of England, Mr. Siddall planned to return to finance, but Mr. Carney once again intervened. "He says 'not so fast, you kind of like this public sector stuff,'" Mr. Siddall recalls. "And truthfully, I did. Funny, I didn't even realize then how much."
His CMHC appointment runs for another two years, though Mr. Siddall is already in talks with the board about a possible extension.
That conversation continues despite a rare setback in Mr. Siddall's lucky streak. Two years ago, he began to notice that his left hand would shake when he yawned and left leg began to flex when he was cycling. He was diagnosed with early-onset Parkinson's disease last year, and is now on medication to control his symptoms.
The diagnosis has made him more diligent about exercising and getting enough sleep. But it has otherwise done little to slow him down. An avid cyclist, he launched a charity bike ride in Collingwood that last year raised $200,000 for Parkinson's research.
"It's been kind of a dose of perspective," he says. "I do reflect on how lucky I am. If this is the worst thing that happens to me, life's pretty good."