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Interest rate volatility due to evolving market conditions and lower paid insurance claims resulting from continued high house prices have had an impact on first quarter results for Canada Mortgage and Housing Corporation (CMHC), as indicated in the Q1 2022 financial report released today.
In Q1 of 2022 we saw increased volumes and higher premiums and fees received in all of our insurance products: transactional homeowner, multi-unit and portfolio insurance, as compared to the same quarter last year. There were fewer claims paid for mortgage loan insurance as a result of increasingly strong economic conditions.
“Current market conditions are leading to significant interest rate volatility and are having a direct impact on the fair value of our investment portfolio and defined benefit liabilities,” said Michel Tremblay, CMHC’s Chief Financial Officer and Senior Vice-President, Corporate Services. “We are currently well-positioned from a capital and liquidity perspective and will continue to monitor market movements in coming quarters.”
Additional quarterly report highlights for three-month period ending March 31, 2022:
- We declared $995 million of dividends to our shareholder, the Government of Canada in Q1 2022, which were paid in April 2022.
- Our net income decreased from the same quarter last year primarily due to insurance claims which were higher than in the same quarter of last year when economic conditions significantly improved as the economy recovered from COVID-19. In addition, we realized losses on investments sold in the quarter as a result of higher interest rates.
- In Budget 2022, the Government of Canada announced adjustments to existing housing programs as well as new investments to be delivered by CMHC. This includes $4 billion over five years to launch a new Housing Accelerator Fund aiming to create 100,000 new housing units.
- We are determining the timing for the launch of initiatives announced in Budget 2022 and anticipate that the impacts on our financial statements will start later this year. Some items announced in Budget 2021 are also expected to have impacts to CMHC`s financial statements later this year.
- We continue to deliver the NHS, a 10-year initiative with investments of more than $72 billion giving more Canadians a place to call home. The NHS covers the entire housing continuum, from shelters and transitional housing to community and affordable housing, to market rental and homeownership. We also report quarterly on the progress on the NHS online.
| Q1 Highlights | Three months ended 31 March 2022 |
|---|---|
| Net income ($M) | 394 |
| Government funding for housing programs ($M) | 1,655 |
| New securities guaranteed ($B) | 43 |
| Insured volumes (units): Transactional homeowner | 12,438 |
| Insured volumes (units): Portfolio | 2,050 |
| Insured volumes (units): Multi-unit residential | 41,789 |
| Capital management | As at 31 March 2022 |
|---|---|
| Total Mortgage Insurance capital ($B) | 10.2 |
| Mortgage Insurance capital available to minimum capital required (%) | 192% |
| Total Mortgage Funding capital available ($B) | 1.4 |
| Mortgage Funding capital available to capital required (%) | 148% |
| Insurance-in-force ($B) | 394 |
| Canadian residential mortgages with CMHC insurance coverage (%) | 23.3% |
| National mortgage arrears rate (%) | 0.27% |
The full Quarterly Financial Report for Q1 is available online.
CMHC supports the housing market and financial system stability by providing support for Canadians in housing need, and by offering housing research and advice to all orders of Canadian government, consumers and the housing industry. For more information, follow us on Twitter, YouTube, LinkedIn, Facebook and Instagram.
For information on this release:
CMHC Media Relations
media@cmhc-schl.gc.ca
