Ontario Budget Review

by Mortgage Professionals Canada | Apr 12, 2019
View budget excerpts pertaining to mortgage and housing industry.

On Tuesday, April 9, Mortgage Professionals Canada held its first Queen’s Park Day under a Progressive Conservative Ontario government. We were honoured to have met with well over 50 MPPs throughout the day, fortuitously in the same week as the Ontario Budget (April 11), entitled, Protecting What Matters Most. This is Minister of Finance Victor Fedeli’s first for Premier Doug Ford’s government, and it helps demonstrate Ontario is “open for business”. It is a positive budget for the mortgage brokering sector and for housing, detailed below.

We are actively participating in the Government’s review of the Mortgage Brokerages, Lenders and Administrators Act (MBLAA) at the invitation of the Ministry of Finance and MPP Doug Downey, Parliamentary Assistant to the Minister of Finance and the designated point person for the review. We are pleased to be meeting frequently with Mr. Downey, his staff, Ministry of Finance Staff and officials at the nascent Financial Services Regulatory Authority of Ontario (FSRA) as they all work to assist the important mortgage broker industry and its many clients.

The following section is from the April 11 budget as it pertains to our industry:

Modernizing Legislation for Mortgage Brokers and Lenders

For many middle‐class Ontario families, owning a home is becoming harder as the people of Ontario adjust to the federal government’s January 2018 mortgage rule changes. The insured and uninsured mortgage stress tests have reduced consumers’ purchasing power, and have prevented many from qualifying for a mortgage [our bolding]. As a result, an increasing number of buyers are turning to private financing to purchase a home. The government supports a strong regulatory framework that protects consumers, but is concerned that the federal government’s mortgage rule changes have resulted in unintended consequences in the market, and are making it harder for people to afford a home.

It is within this context that in October 2018, the government appointed MPP Doug Downey, Parliamentary Assistant to the Minister of Finance, to conduct a review of the Mortgage Brokerages, Lenders and Administrators Act, 2006. As part of this review, the Ministry of Finance conducted a public consultation earlier this year and received input from stakeholders in a number of different sectors, including banking, mortgage brokers, appraisers, insurance and legal services. The submissions received provided a number of innovative ideas on how to reduce regulatory burden to enable mortgage brokers to focus on helping their clients, including suggestions to streamline requirements for commercial mortgage transactions to better reflect business needs. MPP Downey has also consulted extensively with the mortgage broker industry, and has received detailed feedback from that sector and other related industries. MPP Downey will provide recommendations to the government in the coming months. (2019 Ontario Budget, p.234)

We support the Ontario government as it works to improve housing affordability, and are pleased to be working with Mr. Downey, a real estate lawyer by training and a housing expert, as we collectively move forward with the MBLAA review.

We also made clear to the many MPPs we met with that we have confidence in the leadership team at FSRA, from Mark White and Huston Loke on down, and that we look forward to continuing to work with them through the transition of responsibilities from FSCO to them in the coming months. Regardless, as with any government with whom work, we will continue to keep an eye on fees and regulatory issues pertaining to our industry and will address them with officials as the need requires. We will be proactive when called for.

The Budget also makes clear the Ford government’s desire to help Ontario’s 470,000 small and medium-sized businesses (SMEs). “The government remains committed to cutting the small business corporate income tax rate by 8.7 per cent (p.180).” SMEs employ approximately one-third of Ontario workers; because most of our members are employed by or as SMEs we see them actively benefiting from the government’s desire to reduce red tape, regulatory burden and taxation in the coming months and years.

Also of note to our members, the government also announced the Ontario’s Housing Supply Action Plan, its strategy to increase Ontario’s housing supply. It is early days, but this is how this Plan is being described:

Ontario’s Housing Supply Action Plan will bring forward solutions to make it faster and easier to build housing, to help boost housing supply and make housing more affordable. The plan will be flexible so that each community can build what it needs while ensuring the protection of sensitive areas like the Greenbelt, preserving cultural heritage, and maintaining Ontario’s vibrant agricultural sector.

The province is committed to reducing the barriers that prevent people from getting the housing they can afford and that meets their needs. The action plan will make it easier to develop the right mix of housing where it is needed, lower the costs of development, make it easier to develop rental housing and address other concerns and opportunities to increase the housing supply.

The Housing Supply Action Plan will also support the reduction of red tape, making it easier to live and do business in Ontario. In addition, the plan will help support the residential construction industry, which is a major source of employment in Ontario and an important part of the province’s economy. A stable housing market with sufficient supply will also help attract new investment to Ontario. (p.143)

In its consultation earlier this term (which included over 2,000 online submissions), the government asked for input on five themes:

  • Speed: it takes too long for development projects to get approved.
  • Mix: there are too many restrictions on what can be built to get the right mix of housing where it is needed.
  • Cost: development costs are too high because of high land prices and government‐imposed fees and charges.
  • Rent: tenants need to be protected, and it should be easier to be a landlord in Ontario.
  • Innovation: other concerns, opportunities and innovations to increase housing supply.

(p.146)

Specifics will be forthcoming, but we remain optimistic and will add Mortgage Professionals Canada's collective voice with those of leading local groups on the issue, including the Ontario Real Estate Association and the Ontario Home Builders’ Association.

Another recommendation to Ontario MPPs was legislating as-of-right zoning near planned, under construction and, possibly, existing higher order transit hubs, suggesting that development on lands within a 10-minute walk (roughly 800 m) of higher order transit should not face the headwinds they currently tend to face from small local ratepayer groups. Transit is an enormous, taxpayer-funded investment which should be maximized; we look forward to the government doing what it must to maximize the return on such investments and to maximize the supply to meet the obvious, continuing demand from aspiring homeowners to live near new, quality transit.

We are pleased by the leadership role being taken by the Ford government on the fraught Toronto transit file. Yes, transit plans absent funding plans are plentiful but it seems this government will do what it takes to make the “Ontario Line” and its other ambitious subway and LRT lines announced by Premier Ford yesterday a reality. A focus on doing rather than talking about doing is a nice change.

As it pertains to our Ontario members, the 2019 Ontario Budget is a positive for our industry. We will update members as issues arise and developments warrant, but we are pleased and honoured that the Ford government is actively listening to and working with Mortgage Professionals Canada as an important stakeholder.