Skip to main content

Report On Business CMHC doesn’t expect to cover major losses from Fort McMurray blaze

Burned out houses are shown in the Abasands neighbourhood in Fort McMurray.

JONATHAN HAYWARD/THE CANADIAN PRESS

Canada's federal mortgage insurer said it is not expecting to shoulder "significant" losses from the wildfires in Fort McMurray, Alta.

Canada Mortgage and Housing Corp., which backstops most of the country's mortgage market, said only 10 per cent of its insured loans in Fort McMurray are in areas with serious damage or complete losses.

The bulk of its insured loans are in neighbourhoods with some fire damage and 13 per cent are in areas where the conditions are still being determined, the agency said.

Story continues below advertisement

More important, the Crown corporation stressed its insurance does not provide coverage for force majeure events such as the wildfires and said homeowners are required to have regular insurance to protect against fire damage to their houses.

"CMHC's potential loss is therefore limited to claims resulting from the indirect economic consequences of the event such as a decline in property value," the agency said in a statement. "Claim losses to CMHC are not expected to be significant."

The federal housing agency said it has insured about 8,400 loans worth $3.7-billion in Fort McMurray and the surrounding area affected by the fires in northern Alberta.

Home buyers are normally required to have insurance to protect against a mortgage default if they make a down payment of less than 20 per cent. CMHC is the country's largest mortgage-default insurer and is backstopped by Ottawa.

The agency said it has provided banks with flexibility to help homeowners who have suffered suffered damages because of wildfires. The agency listed options such as payment deferrals and mortgage reamortizations.

Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter