Saturday, December 24, 2011


I posted this as a comment on a previous post but it really needs more discussion :

This is what the IMF says about the CMHC.

“Since CMHC is now one of the largest financial institutions in Canada and the key backstop to the housing market, it would be useful to undertake a review aimed at ensuring that CMHC has a modern and effective governance structure and supervision, and assessing the scope for further strengthening its risk management,” said one of dozens of recommendations the IMF made in its annual report on the Canadian economy.


In the question and answer session they mentioned more oversight and supervision of the CMHC being needed several times, and remember we (Canada) are supposed to be the poster child for financial responsibility!

Who is on the Board of Directors of the CMHC? This is from their web-site:

Board of Directors — Biographies

In accordance with the Canada Mortgage and Housing Corporation Act, the CMHC Board of Directors is responsible for managing the affairs of the Corporation and the conduct of its business. The Board is comprised of ten members, including the Chairman, and the President and Chief Executive Officer.

Dino Chiesa
Toronto, Ontario
Chair of the Board of Directors, CMHC
Principal, Chiesa Group

Karen Kinsley
Ottawa, Ontario
President and Chief Executive Officer

James A. Millar
National Capital Region
The Sussex Circle

Brian Johnston
Toronto, Ontario
Monarch Corporation

André G. Plourde
Montréal, Quebec
President, Groupe immobilier de Montréal Inc.

Sophie Joncas
St-Hubert, Quebec
Chartered Accountant

E. Anne MacDonald
Pictou, Nova Scotia

Michael Gendron
Edmonton, Alberta
Chief Financial Officer
Mancap Group

Rennie Pieterman
London, Ontario
Partner, Practical Plumbing Co. Ltd.

A rather small board considering the Hundreds of Billions which are at stake. Their background, from what I have gleaned from the CMHC web-site...

A developer, a CMHC employee and executive, a consultant, another developer, a real estate broker, a CA, a small town lawyer with RE/Wills and municipal experience, another developer, a partner of a plumbing and renovation company.

I am sure they are well meaning people. However I am not reassured. Neither it would seem is the IMF which has called for more supervision.

Where are the well-known Business and Economic Professors from U of T or McGill? Where is the seasoned insurance executive who has dealt with major losses? Where is the representative from the Canadian Tax Payers Association? WHERE is the significant representation of NON-housing interests? Why not have an a housing skeptic Economist like David Madani on the Board?

Would we only let Doctors and Nurses run the Ministry of Health? Of course not. Should the Minister of Health only ever be a doctor, and the Minister of Defence only ever be a soldier? Of course not. We need outside views to be heard too, especially when we all have to share in the liability.

Here is more of what the IMF had to say..

Gian Maria Milesi-Ferretti, the IMF official who led the review of Canada, stressed on a conference call with reporters that the fund has no reason to think CMHC currently represents a risk.

Rather, the IMF simply thinks the government should evaluate closely whether it’s appropriate for one of the country’s largest financial institutions to operate without formal oversight, he said.

This has the potential to have very serious adverse consequences. Anyone who thinks we cannot have a crash like the US because we do things differently here, have not lived through the last few crashes we have had here! This time the stakes are much higher.


  1. How about a lawyer who sues shoddy developers or a bankruptcy-advisor who deals with people who are overloaded with debt and cannot make payments?

  2. Merry Christmas Fish!

    I like this post.

    It is astonishing how biased the CMHC board is towards developers. Non-housing interests, taxpayer and academic interests for sure need to be there. Also, where is the expertise on risk analysis? Where is the government representation? The people are probably "competent", and maybe it would be overstating things to call some of them lightweights, but some of those credentials leave me profoundly under-whelmed.

  3. Thanks Panda and you.

    When I look at who is around the table of this huge organization which has the potential to cause us all a LOT of pain, it is not reassuring.

    You have to wonder who decided on the composition. Was it politicians or CMHC staff or..?

  4. This should answer your question why CMHC are so pally with the developers. What better business model than the one in China!

    CMHC program helps local firms cash in on China’s building boom

    Ten B.C. companies have been involved in Vancouver Forest, a huge Beijing-area construction project

    Read more:

  5. Money laundering in BC & US is very real.

    "The cabinet said the former railway minister Liu Zhijun and Zhang Shuguang, a former deputy chief engineer at the railway ministry, would be among those punished for the accident.

    Liu was sacked in February over corruption charges, after he allegedly took more than 800 million yuan ($125 million) in kickbacks over several years on contracts linked to the high-speed network."

    read the last 2 para

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