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CMHC exists for one reason: to make housing affordable for Canadians. Our bold aspiration—that by 2030, everyone in Canada has a home that they can afford and that meets their needs—animates this singular focus. In 2019, we restructured CMHC to reorient our activities toward our clients and accelerate the achievement of our goal.
2019 highlights
We delivered the second of the 10-year, $55-billion+ National Housing Strategy to reduce housing need and homelessness and remain on track to achieve our deliverables. We maximized rental housing supply programs, especially the National Housing Co-investment Fund, the Rental Construction Financing initiative and the Affordable Rental Innovation Fund. Additional National Housing Strategy initiatives were launched in 2019, including the First-Time Home Buyer Incentive and Shared Equity Mortgage Providers Fund, the Federal Lands Initiative and the Canadian Community Housing Resource Network.
Promulgation of the National Housing Strategy Act was a milestone achievement for CMHC and Canada. The Act affirms that adequate housing is a fundamental human right in international law. It requires the federal government to maintain a national housing strategy and regularly to report on results, ensuring that housing affordability remains a priority for generations to come. Moreover, it manifests an independent review and reporting framework to surface and explore systemic barriers to housing.
In 2019, our commercial operations earned $1.6 billion on $4.7 billion of revenues, generating a return on equity of 14.3% (our government assistance programs are operated to break even). Our ongoing technology and business transformation enabled us to further automate certain routine tasks. We achieved substantially all of our strategic plan targets for the sixth consecutive year. Just as our operations emphasized rental supply, we also continued to speak out against homeownership policies that stimulate demand via increased borrowing. These jeopardize Canada's financial stability, economic growth and social inclusivity and, by promoting suburban development, they also result in increased greenhouse gas emissions since it encourages more car usage. Containing housing demand and limiting indebtedness are also reinforced by the mortgage insurance stress test, notwithstanding opposition from mortgage brokers, realtors and homebuilders. Our role is to promote housing affordability, not to stay silent when the real estate industry seeks to preserve its income at the expense of housing affordability.
ROWE™, mobility and the Future of Work
Through our 10-year partnership with Accenture, we continue to modernize CMHC's Information Technology suite and put technology at the core of our future, even as we reap the benefits of the work done to date. We are the largest organization in Canada to adopt a Results-Only Work Environment (ROWE) method, where people have the autonomy to choose when and where to work, as long as they deliver the results expected of them. As a result, we're seeing higher levels of productivity, increased innovation and improved employee engagement. As a complement to ROWE, we are also transforming our physical environment. We have eliminated assigned offices and are creating spaces for the chance collision of ideas that spawn innovation. Taking advantage of our modernized Information Technology suite, we are renovating our offices into technologically enabled, adaptable spaces — a living laboratory to advance housing innovation.
Diversity and inclusion CMHC's renovated office spaces will incorporate universal design accessibility principles as we aim to be an example to others in the public and private sectors — a standard-bearer for inclusivity within our workforce and across the country.
We score above Canadian demographics in a number of areas, including gender diversity. Half of our people leaders are women — an achievement that earned us recognition by McKinsey & Company as a leader in gender diversity in the workplace. While we take pride in our achievements to date, we also recognize that more needs to be done, including with respect to Indigenous people and visible minorities. Notably, in 2019 CMHC hosted the second annual Diversity and Inclusion Conference in Ottawa.
Climate change
We have a responsibility to Canadians to ensure the enduring value of the investments we are making in housing today. In 2019, the Board identified climate change as a defining factor in our long-term outlook. Climate change will determine where housing is built, and how it is financed, designed, constructed and maintained. We must better understand what this will mean for our business and housing in Canada. To that end, we are developing a climate change strategy that serves our raison d'être of making housing affordable for Canadians. We have appointed a Chief Climate Officer to advance our climate risk management capabilities to undertake targeted analysis and to explore opportunities. We have taken some first steps in this report toward confirming with the recommendations of the Financial Stability Board's Task Force on Climate-related Financial Disclosures.
Outlook
As this is my final annual report message as President and Chief Executive Officer of CMHC, I want to thank all of my colleagues for the trust they placed in me since 2014. Our country is fortunate for many things; CMHC and the people who breathe life into it are among our national treasures. I will miss this place and remain a booster of their unwavering commitment to ensure that all Canadians have the dignity of a home
Evan Siddall
President & CEO
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