Now that the dust has settled on the news of Jim Flaherty’s resignation and a successor has been named, financial experts and media commentators are weighing in on his track record as finance minister.
While some rave about his steady hand during the recession and others criticize him for failing to leave behind a meaningful legacy, one topic kept popping up in news reports and op-eds: the housing market.
Here’s what journalists, financial institutions and professional associations are saying about Flaherty’s time in the cabinet office:
- It’s not terribly surprising that the Flaherty – who capped the amortization period in 2012 in the wake of housing bubble fears – is not terribly popular among the mortgage broker community. The website Mortgage Brokers News conducted a poll in which 52 per cent of brokers surveyed said the industry will benefit from the Finance Minister’s resignation. Len Lane of Verico Brokers for Life told the website: “There aren’t too many changes they can make anyway; we’re pretty much at the point where they have stripped it down to where it was a decade ago or even farther back.”
- Tabulating his hits and misses during his time as finance minister, the Financial Post put Flaherty’s mortgage moves firmly in the “hit” category. The newspaper applauded his decision to put the CMHC under the the auspices of the Office of the Superintendent of Financial Institutions as well as shortening the amortization period to 25 years, which had peaked as high as 40 years.
- TD also supported the shortening. Craig Alexander, chief economist of Toronto-Dominion Bank, told the Globe and Mail, “These are the sort of policies that take political courage.” The Calgary Herald came out in support of the 2012 mortgage rules, saying existing conditions were threatening to create a similar housing bubble to the one that popped in the United States in 2008.
- The Globe and Mail also published a piece by Armine Yalnizyan, an economist at the Canadian Centre for Policy Alternatives. Yalnizyan wasn’t so quick to praise Flaherty’s 2012 mortgage changes, noting that “people forget it was none other than his office that gave the green light on zero-down 40-year mortgages in 2006.” Bloomberg News echoed this, pointing out that he loosened the rules in his early days as finance minister only to “tighten them again repeatedly as Canadians, spurred by low interest rates, took on record debts as a share of income.”