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The Canada Mortgage and Housing Corporation ( CMHC ) complex in Ottawa.Sean Kilpatrick/The Globe and Mail

The government is expected to announce soon who will be running Canada Mortgage and Housing Corp., the largest federal Crown corporation, in the coming years, a period during which it will face scrutiny like never before.

The leaders who are announced will also be in place as debate heats up about whether to privatize the mortgage insurer, after a period in which its balance sheet – and the risk it imposes on taxpayers – swelled.

As part of Finance Minister Jim Flaherty's effort to steer the housing market towards a so-called "soft landing" and stem the growth in taxpayer exposure to the market, he has taken steps to rein in CMHC in the last couple of years, including putting it under the official eye of Canada's financial regulator and adding the deputy minister of finance and the deputy minister of human resources and skills development to its board.

After allowing the crown corporation to balloon by increasing the cap on the amount of mortgage insurance it can have outstanding from $350-billion at the end of 2007 to $600-billion in 2009, Ottawa decided not to raise that ceiling any further last year as CMHC's portfolio ticked up towards the limit – forcing the insurer to ration the amount of bulk insurance it sells to banks. And Mr. Flaherty has openly mused about whether some form of privatization might be a logical step in the future, and suggested that the crown corporation has grown well beyond its original mandate.

Now the clock is ticking down to the end of long-time CEO Karen Kinsley's contract, which expires June 15. So far it has not been renewed, and two sources familiar with the situation suggest that Ms. Kinsley, who has been CEO of the crown corporation since 2003 after working her way up its ranks, has not been seeking another term.

Ms. Kinsley, who eschewed the limelight but who sources say is a force to be reckoned with, was most recently reappointed CEO in 2011, for a two-year term, and prior to that in 2008 for a three-year term. Now observers are awaiting an announcement from Human Resources and Skills Development Minister Diane Finley, who is technically the minister responsible for CMHC, about what will happen in June.

While this announcement won't draw the attention that the appointment of a Bank of Canada governor will, the position is key to the functioning of the country's financial system and broader economy. Indeed, former central bank governor David Dodge butted heads with Ms. Kinsley during his tenure over what he argued were loose rules, such as providing insurance on 35-year mortgages, that could needlessly stoke the housing market. Tightening the mortgage insurance rules has since become a key part of Ottawa's attempts to stop consumers from racking up too much debt in a period of unprecedentedly low interest rates.

Financial players who deal with CMHC are now awaiting an announcement from Human Resources and Skills Development Minister Diane Finley, the minister who is officially responsible for CMHC, about what will happen in June. The Governor General will officially make the appointment, with advice from cabinet. The salary range for the job in 2012 was $363,800 to $428,000.

In the meantime, the government has been looking for more than a year for a new chair for CMHC, a period during which Sophie Joncas – who works at a television production company and is a professor of economics and finance at the Academie de l'entrepreneurship Quebecois Inc. – has been interim chair.

With the financial regulator, the Office of the Superintendent of Financial Institutions, now combing through CMHC's books, its head Julie Dickson might wade into the decisions. Ms. Dickson has made a point of telling banks and insurers to bolster their boards with more directors who have experience in their business lines, and keeps Bay Street's boards on their toes with regular reviews and questioning.

With assets of more than $300-billion, CMHC is one of the country's largest financial institutions and the decisions about who runs it will be closely watched by bank executives. Not only does CMHC keep their most important lending business – mortgages – humming by offering government-backed protection, but its securitization arm is a vital element to their funding and also results in sizable fees for the banks' capital markets divisions when they get a mandate to sell securities such as Canada Mortgage Bonds.

(Tara Perkins is a Globe and Mail Real Estate Reporter.)

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