Did you know...? - Edition 29

February 19, 2010

Did You Know That… Finance Minister Jim Flaherty announced prudent measures to protect Canada’s economic recovery. Although there’s no clear evidence of a housing bubble, the Government is looking ahead and taking prudent and cautious steps to help prevent one.  This announcement will help ensure that more Canadians don’t take on debt they won’t be able to afford should house prices fall or interest rates rise. The Government of Canada understands the importance of the mortgage and housing sector to the economy and the country.  As recognized by the IMF and others, Canada’s prudent regulation of the financial services industry ensured that we were in a much stronger position to weather the economic downturn. The Government will therefore adjust the rules for government-backed insured mortgages as follows: (1) Require that all borrowers meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter term. This initiative will help Canadians prepare for higher interest rates in the future; (2) Lower the maximum amount Canadians can withdraw in refinancing their mortgages to 90 per cent from 95 per cent of the value of their homes. This will help ensure home ownership is a more effective way to save; and (3) Require a minimum down payment of 20 per cent for government-backed mortgage insurance on non-owner-occupied properties purchased for speculation. For more information, http://www.fin.gc.ca/n10/10-011-eng.asp

Did You Know That… Minister Oda and Minister MacKay announced that a meeting of G-8 development ministers will be held in Halifax on April 26-28, 2010. G-8 Ministers will be meeting to discuss the Prime Minister’s initiative on maternal and child health and other development issues. Each year, it is estimated that 500,000 women lose their lives during pregnancy or childbirth. Further, an astonishing nine million children die before their fifth birthday. This is unacceptable. As President of the G-8 in 2010, Canada is championing a major initiative to improve the health of women and children in the world’s poorest regions. Far too many lives have already been lost for want of relatively simple health care necessities such as clean water, inoculations and better nutrition. The meeting of development ministers will lay the foundations for proposals that will go to the G-8 Leaders’ Summit in June. Decisions will be made based on one clear objective: saving lives of vulnerable children and mothers in the developing world. 

Did You Know That… Minister Stockwell Day, President of the Treasury Board, emphasized the need for fiscal restraint in the upcoming budget. As we look toward deficit reduction once the economy has recovered, it will be essential for government to live within its means. All Canadians have had to make sacrifices over the past year.  Families everywhere have had to take a look at their own expenses and set priorities. They expect their government to do the same…and we will. We have a responsibility first and foremost to Canadian taxpayers and must ensure that their money is spent wisely, prudently and fairly – where it will do the most good.

Did You Know That… Your Government confirmed that Canada will not be supporting the introduction of a new global tax on financial services and urged countries instead to adopt sound regulatory practices like Canada’s. Canada will not be supporting a new tax on financial services. Canada in no way contributed to the global recession. Throughout the crisis, our banks have maintained healthy leverage ratios and largely avoided exposure to toxic assets. No major Canadian financial institution failed and none required bailouts from the government, as was the case in the U.S. and other European countries. The strong performance of our banking sector showcased the effectiveness of Canada’s regulatory approach.  We will use our G-20 chairmanship this year to urge the adoption of similar practices globally. Your Government is committed to reducing taxes, not to imposing a global tax on daily financial services. Modest and responsible regulation is the answer – not taxation.