The Canadian Taxpayers Federation called foul Wednesday on the Canada Mortgage and Housing Corporation’s $48 million worth of employee bonuses in 2020 and 2021 — a time when housing sales and prices skyrocketed.
“Why is the CMHC patting itself on the back and handing out millions in bonuses while Canadians are facing a housing affordability crisis?” asked Franco Terrazzano, federal director of the federation, via a statement Wednesday.
“If its number one goal is housing affordability, then it doesn’t make sense for the CMHC to give its employees bonuses while Canadians are struggling to find homes,” said Terrazzano.
The bonus worked out to more than $12,000 for each employee that received a bonus each year on average. More than 93 per cent of CMHC employees received a bonus in 2020 and 94 per cent of employees received a bonus in 2021, stated the federation.
Asked why employees are getting bonuses, CMHC spokesperson Leonard Catling stated via email: “As a Crown corporation, CMHC has both a public mandate to deliver housing programs on behalf of and with funding from the Government of Canada, as well as commercial, profit-generating operations such as our mortgage insurance business.”
The statement went on to say that since 2017 CMHC has returned $14.29 billion in the form of dividend payments to its shareholder, the Government of Canada.
Catling continued: “CMHC is committed to recognizing employee performance and contributions to the organization through cash compensation, which includes a blend of base pay, and incentive pay.”
He said that the bonuses are based on performance ratings and mortgage insurance revenue can be part of that performance.
“An employee’s incentive pay is based on their individual performance of their specific role within CMHC. Each employee will have a set of goals for the performance review cycle and the incentive is linked to how well they perform their specific role based on those goals,” explained Catling.
As the country’s housing agency, CMHC sets policies on mortgage underwriting — such as one’s debt-to-income ratio, known as the stress test — thus setting the table for homebuyers.
CMHC also provides mandatory mortgage default insurance on all mortgages with down payments of less than 20%. It also offers commercial mortgage insurance products. The mortgage insurance revenues are earned from premiums, fees and investment income.
Mortgage insurance revenue jumped from $2.65 billion in 2019 to $2.98 billion in 2020; and total mortgage funding activity went from $249 billion in 2019 to $269 billion in 2020, according to the most recent CMHC annual report of 2020.
Nationwide, prices went up 26% in 2021 and a record 666,995 sales were 30% higher than the 10-year average.
