OTTAWA HIKES LIMIT FOR CONSTRUCTION FINANCING BY $20B
Sep 26, 2023
By Bob Komsic
The ceiling on mortgage bonds is being raised to $60-billion and follows the government’s recent move to remove the GST off the construction of new rental apartments.
”We’re already seeing more demand for financing of new rental construction,” Finance Minister Chrystia Freeland pointed out while announcing the additional $20-billion that’s being unlocked on its Canada Mortgage Bonds program.
The bonds are sold by Canada Mortgage and Housing Corporation with the proceeds then used to offer mortgage loan insurance to financial institutions.
They can then pass on lower interest rates to developers.
”When lenders pass on favourable rates to builders, builders build more homes,” adds Housing Minister Sean Fraser.
”It’s that simple.”
Ottawa expects the move will ensure 30,000 more rental units are constructed annually.