Canada, provinces discuss whether more housing action needed

OTTAWA (Reuters) - Canada’s Finance Minister Bill Morneau said on Monday he had discussed with his provincial counterparts whether more actions are needed to ensure the stability of the country’s housing market.

Canada's Finance Minister Bill Morneau takes part in a news conference following a meeting with his provincial counterparts in Ottawa, Ontario, Canada, June 19, 2017. REUTERS/Chris Wattie

The federal government acted last year to tighten mortgage lending rules to rein in Canada’s housing boom, while British Columbia and Ontario have implemented taxes on foreign buyers in Vancouver and Toronto, respectively.

Morneau told reporters he had shared with provincial finance ministers the Finance Department’s view on “the continuing importance of monitoring the housing market, the need to make sure that we remain vigilant, and consider whether there is additional actions required to best assure the stability of that market.”

Morneau said the government was continuing to watch the situation at non-bank lender Home Capital Group Inc, which looks to be “working its way through its challenges” and called its recent settlement with the Ontario Securities Commission (OSC) “positive.”

Home Capital last week agreed on a settlement with the OSC and accepted responsibility for misleading investors about problems with its mortgage underwriting procedures.

Depositors have withdrawn 95 percent of funds from Home Capital’s high interest savings accounts since March 27, when the company terminated the employment of former Chief Executive Martin Reid.

Morneau said top policymakers at the Bank of Canada told the gathered finance ministers that the economy was doing better than had been expected a few months ago.

The federal and provincial governments also discussed the need to keep the tax rate on recreational marijuana low and have a coordinated approach across the country, though ministers did not discuss revenue estimates, Morneau said.

“Revenue shouldn’t be our driving goal,” said Morneau.

Canada is on track to legalize recreational marijuana by next summer, though the federal government has left the details of how the drug will be sold up to the provinces.

The Liberal government has said legalizing marijuana will keep it out of the hands of children and reduce drug-related crime. It also wants to keep the sale price low enough that users will not turn to the black market.

Reporting by Leah Schnurr; Editing by G Crosse and James Dalgleish