Crown corporation says it continues to navigate economic volatility
Ongoing economic instability and sustained high inflation had significant impacts on the third-quarter financial results of Canada Mortgage and Housing Corporation.
While net income went up from $414 million in Q3 2021 to $433 million in Q3 2022, total expenses also increased by 6% during the same period. This was mainly because of a $22 million increase in insurance claims expenses.
“Insurance claims expense in the quarter continues to be low combined with a lower provision for claims, [but] there was a larger decrease in the same quarter last year when the provision for claims was reduced due to favourable conditions as the economy recovered from COVID-19,” CMHC reported.
Total revenues and government funding grew by 5% ($57 million) annually, propelled by a $16-million increase in premiums and fees earned due to higher mortgage insurance volumes compared to prior years.
Read more: What would it take to solve Canada’s ongoing housing affordability crisis?
“The impacts of inflation and movements in interest rates are seen through declines in our investment portfolio and actuarial gains on our defined benefit plans,” CMHC said. “Unit volumes have decreased from the previous quarter for transactional homeowner and multi-unit products, as the market continues to adjust to higher interest rates.”
However, mortgage arrears remained low, with CMHC citing strong employment numbers as a major driver.
“We remain in a stable position to withstand further interest rate volatility and will continue to monitor the impacts of evolving market conditions on our business,” said Michel Tremblay, chief financial officer and senior vice president of corporate services at CMHC.
