Annual Public Meeting

Canada Mortgage and Housing Corporation - 2025 Annual Public Meeting

00:00:01:00 [Light upbeat music plays.]

[Visual: Slide titled "Canada Mortgage and Housing Corporation - 2025 Annual Public Meeting." Clips of detached houses in a rural community and condo buildings under construction play. On the footer, text reads "CMHC.ca" next to the Government of Canada Wordmark and the bilingual CMHC logo.]

00:00:05:00 [Speaker: Don Iveson - Chair, Board of Directors, CMHC]

Don Iveson: Welcome, everyone, and thank you for taking part in CMHC's 2025 Annual Public Meeting.

00:00:10:00 [Visual: Don Iveson sits in an office. He wears a blue collared shirt and a black blazer. A text box reading "Don Iveson - Chair, Board of Directors, CMHC" appears temporarily.]

Don: My name is Don Iveson and I'm the Chair of CMHC's Board of Directors.

Now, I'd like to start by acknowledging respectfully and thanking the Algonquin and Anishinaabe people on whose traditional unceded territory this is being recorded. We have deep gratitude for this land and respect and appreciation for its many generations of caretakers.

[Audio: Music fades out.]

Don: We have people joining us today from many different communities and backgrounds, and it's important to recognize that we are connected through the traditions, values, and histories of our ancestors. So please take a moment yourself to reflect on the land that you're on and the good things that it has brought you.

Now, looking back at 2024, housing continued to capture headlines almost every day. Canadians followed along as folks in government, the private and not-for-profit sectors all debated new solutions. And meanwhile, developers were asked to do more with less to make their numbers work. And over the course of the year, housing projections became as hotly anticipated as hockey scores. And through it all, CMHC was there with policy advice for decision makers. It was there with programs and products for housing developers. And it was there with trustworthy data to make sense of it all.

2024 is also the year that I joined CMHC as board chair. It's been an honour to help oversee all this crucial work. And I want to thank my predecessor, Derek Ballantyne, for his contributions in bringing us to where we are today. I'm really pleased to lead a strong board anchored by both long-standing members and revitalized by the many new ones who joined us this year. Our backgrounds vary, giving us the broad outlook that good stewardship requires. What we share, though, most of all, is a commitment to the organization and a commitment to the well-being of Canada's housing system.

CMHC also welcomed a new CEO in 2024. Coleen Volk did an amazing job getting up to speed and making a positive impact right away, supported, of course, by a strong team. And she also inherited an organization in good shape thanks to the leadership of Michel Tremblay, who acted as CEO on an interim basis. He's now gone back to his post as CFO and Senior Vice-President of Corporate Services. But we're fortunate to still be able to call on his experience and knowledge, along with that of the rest of the Executive Committee. The Board is truly grateful to all of the leaders who worked to smooth out all of this transition.

This really is a time of change and opportunity for CMHC, and as you'll hear today, it has entered 2025 in excellent shape, ready to support the housing needs of Canadians in even more focused and innovative ways. CMHC is ready to be there again for Canadians.

I'll now pass things over to CMHC's President and CEO, Coleen Volk.

00:03:02:00 [Visual: Slide titled "2025 Annual Public Meeting - Message from the President and CEO" next to a photo of Coleen Volk, a woman smiling while standing in a bright building. She wears a flowing gray and black print open cardigan over a black dress.]

00:03:06:00 [Visual: Coleen Volk sits in a spacious office. She wears glasses, a necklace and a black blazer over a black blouse. A text box reading "Coleen Volk - President and CEO, CMHC" appears temporarily.]

[Speaker: Coleen Volk - President and CEO, CMHC]

Coleen Volk: Thank you, Don. And thank you all for joining us.

As Don noted just now, 2024 came with plenty of housing challenges for Canadians. Many homeowners grappled with higher mortgage renewal rates. Renters faced rising rents in most markets. And far too many vulnerable people struggled to keep a roof over their heads. The year also brought plenty of economic and political changes that impacted our work at CMHC. Throughout it all, we stayed agile and we remained the stabilizing force in turbulent times that Canadians have come to count on.

First, we successfully delivered commercial solutions, even as we saw a surge in demand for these products in 2024. For example, we continued to get strong uptake of MLI Select. This is a mortgage loan insurance product that incentivizes developers to build more affordable rental. We also saw an increase in the securitization products we provide. These programs provide liquidity for mortgage lenders to support Canadians' access to mortgage financing.

Second, we delivered new federal government programs, such as the Co-op Housing Development Program, which will strengthen this integral part of the affordable housing space. We delivered massive volumes through existing programs like the Apartment Construction Loan Program and the Affordable Housing Fund. This is helping builders get the financing they need to build much-needed rental homes. And more municipalities signed on to our Housing Accelerator Fund to help fast-track housing.

Our third focus in 2024 was to continue to produce timely, unbiased research and insights to drive informed decision making. We dug deeper into understanding Canada's supply challenges on a local level. We published thought leadership articles on top housing issues of the day, including Canada's housing construction capacity, and hosted a national housing conference on behalf of the federal government.

Of course, none of this would be possible without the dedicated people who make up CMHC. It's because of them that we're known as a company that makes things happen and makes a difference. I'm also grateful for the support and guidance of our board and their engagement and connection to communities across Canada. My gratitude also extends to our many partners, industry participants, developers, lenders, and non-profits. We can't solve housing challenges without them. Together, we're building toward our shared vision of a Canada where everyone has a home that they can afford and that meets their needs.

And now, Michel Tremblay, our Chief Financial Officer and Senior Vice President of Corporate Services, will share details on our 2024 accomplishments.

00:05:59:00 [Visual: Slide titled "2025 Annual Public Meeting - Key Accomplishments" with a photo of Michel Tremblay, a man smiling while sitting in an armchair. He wears a white collared shirt with a gray tie, gray slacks and brown leather shoes.]

00:06:02:00 [Visual: Michel Tremblay sits in a spacious office. He wears glasses, a white collared shirt, a black tie and a slate jacket. A text box reading "Michel Tremblay - CFO and SVP, Corporate Services" appears temporarily.]

[Speaker: Michel Tremblay - CFO and SVP, Corporate Services]

Michel Tremblay: Thanks, Coleen, and thanks to everyone joining us.

As Coleen and Don said earlier, CMHC made strong progress in 2024, despite challenging times. It's my pleasure to go over some of the highlights of our performance. But first, I'll take a couple of minutes to talk about the economic environment that shaped our work in 2024. The main factors impacting housing were rapid population growth, the effects of elevated interest rates, particularly in the first half of the year, and global economic and geopolitical uncertainties.

00:06:36:00 [Visual: A slide with a side bar reading, "2024 Annual Report." On the slide, three symbols appear next to three blocks of text. First, a hand holding a circle containing a percentage symbol next to text that reads, "Canada's economy grew modestly by 1.5% in 2024, up from 1.0% growth in 2023." Second, an arrow tracing the downward trajectory of a bar graph next to text that reads, "Inflation eased significantly over the year, marking a gradual shift toward stimulating more economic and housing activity." Third, a house with a tag bearing a dollar sign next to text that reads, "For many Canadians, the combination of near-peak home prices and elevated mortgage rates made it hard to afford a home."]

Michel: Canada's economy showed modest growth in 2024. Real GDP increased by 1.5%, outperforming both expectations and the 2023 growth. Job creation wasn't able to keep up with the rapid population growth, leading to a rise in unemployment. Inflation eased over the year, prompting the Bank of Canada to lower its policy rate from 5% in April to 3.25% by December. As a result, there was a shift toward stimulating more economic and housing activities.

But overall, elevated interest rates and modest economic growth slowed housing activities in 2024. Sales remained slow. The combination of near-peak home prices and elevated mortgage rates made it hard for many Canadians to buy.

00:07:25:00 [Visual: Michel Tremblay sits in a spacious office.]

Michel: Rental markets remained tight, but slightly more rental units became available, and vacancy rates rose in most markets. Canada's housing stock grew by 245,000 units. That's more than the past decade's average, but lower than the 2021 peak of 274,000 units.

Despite these challenging economic conditions, CMHC continued to deliver results in 2024.

00:07:50:00 [Visual: A slide titled "Our 2024 Performance" with a side bar that reads, "2024 Annual Report." Text on the slide reads: "504,000+ units new, repaired and assisted by CMHC programs; 118,000+ units new, repaired and assisted, affordable to those in Core Housing Need; 79% of units supported located in markets with greatest need of new and/or improved rental supply; 48% of units facilitated in CMHC were climate-compatible."]

Michel: We helped create, repair and assist more than 500,000 homes in 2024. That's up from 2023, and more than 118,000 of those were for Canadians in core housing need.

Close to 300,000 of the units we supported were in markets facing the greatest rental shortages. That's a 40,000-unit increase over 2023 and exceeded our target by 4%.

Close to 50% of the units we supported in 2024 were climate compatible, surpassing our 25% target in our 2023 results.

00:08:25:00 [Visual: Michel Tremblay sits in a spacious office.]

Now, I'll move on to our consolidated financial highlights. Our consolidated income before income taxes increased by $238 million. That's a 14% increase compared to 2023. It was caused by a few factors:

00:08:39:00 [Visual: A slide titled "Our Consolidated Financial Highlights" with a side bar that reads, "2024 Annual Report," featuring a comparative bar graph with five pairs of bars. First, "Consolidated income before income taxes: 2024 - $1,996 million; 2023 - $1,758 million." Second, "Housing Programs Activity: 2024 – negative $18 million; 2023 – negative $20 million." Third, "Mortgage Insurance Activity: 2024 - $1,056 million; 2023 - $906 million." Fourth, "Mortgage Funding Activity: 2024 - $953 million; 2023 - $860 million." Fifth, "Eliminations: 2024 - $5 million; 2023 - $12 million."]

Michel: First, there was an increase of $212 million in investment income because of higher interest rates and higher investment balances.

There was also a $74-million increase in guarantee fees earned in the mortgage funding activity. This was due to higher National Housing Act Mortgage-Backed Securities and Canada Mortgage Bond annual issuance limits and increases in guarantee fee rates in recent years.

And finally, there was a $65-million increase to insurance revenue because of higher multi-unit volumes compared to last year.

These gains were partially offset by a couple of factors:

One, an increase of 85 million or 48% in insurance finance expenses. This was due to higher balances of insurance contract liabilities and higher locked-in discount rates.

And two, an increase of 37 million in operating expenses. This is due to higher administration expenses in the mortgage insurance activity related to higher multi-unit business volumes.

00:09:40:00 [Visual: Michel Tremblay sits in a spacious office.]

Michel: Our insurance products also played a key role by enabling access to housing financing.

In the second half of 2024, the government announced two reforms to mortgage rules to make mortgages more affordable for Canadians. First, it increased the 1-million price cap for insured mortgages to 1.5 million. And second, it allowed 30-year mortgage amortization for first-time homebuyers and all buyers of new bills.

We implemented these changes in 2024, and we're expecting to see uptake in 2025.

00:10:17:00 [Visual: A slide titled "Mortgage Insurance" with a side bar that reads, "2024 Annual Report" featuring two columns of statistics. The first column includes illustrative graphics. In the first column, the first element features a house with a checkmark next to text that reads, "Insurance-in-force (as at) 31 December, 2024: $440 B." The second element features a shield bearing a house next to text that reads, "Mortgage insurance capital available: 188% of minimum capital required." The text in the second column reads, "Homeowner insurance volumes - 49,569 units; Portfolio insurance volumes - 10,614 units; Multi-unit insurance volumes - 283,711 units; Arrears rate - 0.30%."]

Michel: Looking at our 2024 homeowner insurance results, we helped Canadians to buy more than 49,000 housing units across Canada. Over 14% of these were in rural areas, where, in some cases, we're the only provider.

For portfolio insurance, we insured over 10,000 units. This is down from the previous year due to fewer large pools insured and an overall shift in the composition to smaller-sized pools.

Demand for our multi-unit mortgage loan insurance products remained strong throughout 2024, supporting more than 283,000 housing units. 43% of that was new construction. This is an increase compared to 2023.

At the end of 2024, our total insurance-in-force stood at 440 billion. This represents an increase of 26 billion compared to 2023. The increase is due to growth in our multi-unit insurance, partially offset by decreases in homeowner insurance and portfolio insurance.

The arrears rate includes all loans more than 90 days past due as a percentage of outstanding insured loans. The arrears rate remains low at 0.30%. For comparison, in 2023, it was 0.29%.

Reported delinquencies remained low in all regions.

00:11:38:00 [Visual: Michel Tremblay sits in a spacious office.]

Michel: Our mortgage insurance capital ratio increased from 185% in 2023 to 188% in 2024.

Despite this capital position, we've suspended dividends. That's because we're looking to conserve capital in response to regulatory capital changes from the Office of the Superintendent of Financial Institutions that take effect on January 1st, 2026. It's also in response to a significant increase in our multi-unit insurance business.

We also offer reliable mortgage funding or securitization to approved financial institutions. This is used to ensure Canadians can access mortgage loans through all market conditions and economic cycles.

00:12:18:00 [Visual: A slide titled "Mortgage Funding" with a side bar that reads, "2024 Annual Report" featuring a photo of two people talking in an office alongside a column of bullet points. The bullet points read: "$165 B National Housing Act Mortgage-Backed Securities guaranteed; $60 B Canada Mortgage Bonds securities guaranteed; $1.1 B: Guarantee and application fees received; Guarantees-in-force (as at) 31 December, 2024: $553 B; Economic capital available to economic capital required: 127%."]

In 2024, the Government of Canada authorized CMHC to guarantee up to 60 billion of Canada Mortgage Bonds and guarantee up to $170 billion of mortgage-backed securities. This represented a 20-billion increase in the funding capacity of both products.

In 2024, we continued to provide preferential guarantee fees for mortgage-backed securities that contain social housing loans or multi-family loans insured under the MLI Multi-Unit Flex product or MLI Select product with the affordability commitment.

These affordability-linked pools helped increase the availability of affordable housing. The issuance of these pools continued to increase, totalling 38 billion in 2024, up from 29 billion in 2023.

We provided guarantees for nearly 165 billion in mortgage-backed securities and 60 billion in Canada Mortgage Bonds, again up from 2023.

The guarantee and application fees we received increased by 128 million, or 14%.

At the end of 2024, our guarantees in force were 553 billion, growing by 9% since 2023, as lenders took advantage of a lower prepayment rate and a higher annual issuance limits.

00:13:40:00 [Visual: Michel Tremblay sits in a spacious office.]

As Coleen and Don mentioned earlier, one of our main focuses in 2024 remained delivering government programs and priorities.

Here are some highlights as of December 2024:

00:13:52:00 [Visual: A slide titled "Housing Programs Highlights as at Dec. 31, 2024" with a side bar that reads, "2024 Annual Report" featuring four bullet points. First, "Apartment Construction Loan Program - committed $21.76 billion in loans to support the construction of 56,439 new purpose-built rental units." Second, "Affordable Housing Fund - committed $10.87 billion to support the creation of 41,858 new affordable units and the repair of 168,139 units of community housing stock." Third, "Canada Greener Homes Loan - committed more than $2.37 billion with 77% of applicants having completed their retrofits and received final loan funding." Fourth, "Housing Accelerator Fund - completed 215 agreements committing nearly $4.19 billion over four years to incentivize over 114,545 additional permitted units."]

Michel: Through the Apartment Construction Loan Program, we have committed more than $21 billion in loans to help build more than 56,000 new purpose-built rental units.

Through the Affordable Housing Fund, we have committed close to $11 billion to help create close to 42,000 new affordable units and the repair of over 168,000 units of community housing stock.

The Canada Greener Homes Loan Program, delivered in partnership with Natural Resources Canada, committed more than 2.3 billion for close to 100,000 loans. About 77% of applicants have completed their retrofits and received final loan funding. Round one of the program was almost fully committed by March 31, 2025, and a $600 million top-up announced in the 2024 Fall Economic Statement is also drawing interest.

Our Housing Accelerator Fund incentivized local governments to implement initiatives that remove barriers and fast-track housing development. By the end of 2024, we've signed agreements with 215 municipalities. These included commitments of more than $4 billion over four years and is expected to create more than 114,000 additional housing units.

00:15:09:00 [Visual: Michel Tremblay sits in a spacious office.]

Michel: That covers the 2024 highlights for CMHC.

I invite you to check out our annual report posted on our website for more details.

[Audio: Light upbeat music plays.]

Michel: In closing, I want to reiterate one of the main messages from our Chair and CEO. CMHC continues to respond and be there when Canadians need us most. We will continue to manage the public resources entrusted to us prudently for the benefit of all Canadians.

Thank you for joining us today and for your interest in CMHC and the work we do.

00:15:39:00 [Visual: Slide titled "Canada Mortgage and Housing Corporation - 2025 Annual Public Meeting." Text under the title reads, "Thank you for watching." Beside the text, clips of the sun shining on condo buildings under construction and a wooden house frame play. On the footer, text reads "CMHC.ca" next to the Government of Canada Wordmark and the CMHC logo.]