Canada's Federal Budget 2010
Earlier this week Budget 2010 was announced. The plan boasts of Canada's strong economic position in relation to the G7, confirming broad signs of recovery in the Canadian housing market, with resale housing activity and prices returning back to pre-recession levels. The report states Canada's housing market remains healthy and stable, supported by sound economic factors including low interest rates, rising incomes and a growing population. Moreover, mortgage arrears - overdue mortgage payments - have remained low both during and after the recession.
The initiatives that will affect the mortgage industry in Budget 2010 include:
- Regulations to standardized the calculation and disclosure of mortgage pre-payment penalties (for federally regulated lenders).
- Legislative framework to enable Credit Unions to expand services beyond their provincial borders
- Federally regulated financial institutions will diversify funding sources to include Covered Bonds
- Extension of the Insured Mortgage Purchase Program, until the end of March 2010.
The government's priorities towards infrastructure projects, creating employment and holding interest rates (at least until July 2010) should be viewed as encouragement for today's mortgage shoppers and Canadian Home Buyers.