Canada's Housing Bubble Story: Mortgage Securitization, the State, and the Global Financial Crisis

Abstract

Canada's experience during and after the financial crisis appears to distinguish it from its international peers. Canadian real estate sales and values experienced record increases since the global financial crisis emerged in 2008, rather than declines, and Canada did not witness any bank failures. The dominant trope concerning Canada's financial and housing markets is that they are sound, prudent, appropriately regulated and ‘boring but effective’. It is widely assumed that Canadian banks did not need, nor receive, a ‘bailout’, that mortgage lending standards remained high, and that the securitization of mortgages was not widespread. The truth, however, does not accord with this mainstream view. In fact, the Canadian financial and housing markets reveal marked similarities with their international peers. Canada's banks needed, and received, a substantial ‘bailout’, while federal policies before and after the financial crisis resulted in the massive growth of mortgage securitization and record household indebtedness. This article documents the growth of Canada's housing bubble, the history of mortgage securitization, and of government policies implemented before and after the crisis. Instead of making the Canadian financial and housing sectors more resilient and sustainable, the outcomes of state responses are best understood as regressively redistributive.

Stopping the ‘War on the Car’: Neoliberalism, Fordism, and the Politics of Automobility in Toronto

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Housing Trajectories Across the Urban Hierarchy: Analysis of the Longitudinal Survey of Immigrants to Canada, 2001–2005

“…Given the speed at which immigrants entered the housing market and became homeowners during the LSIC further justifies this future work. As Walks (2012Walks ( , 2014 explains, there were significant economic incentives to taking on a mortgage during the early 2000s, and various institutional paradigms were in place to provide 'easy credit' to homebuyers. Mortgage lending rules surrounding tax credits, amortization periods, and securitization policy all could have shaped the immigrant acquisition of homeownership seen in this article.…”

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