insurance to
lenders in case of defaults and homebuyer assistance.
Since 1954 one in three Canadian home buyers have made
use of CMHC's programs. The CMHC also has a large research
wing that analyses the housing situation in Canada and
housing design and technologies. The Minister of Labour
and Housing is responsible for the maintenance of the
agency.
Near
the end of World War II, the Canadian government began
to worry about the demobilization of thousands of soldiers
in Europe, and their re-entrance to Canadian society.
With so many people coming back to Canada, a number
of problems would arise, one being that there may not
be enough housing existing to accommodate the soldiers
and their desire to have families.
History
The agency was created in 1946 in response to housing
demands after the return of World War II veterans
and societal changes after the war included a policy
that every family in Canada have their own home. The
CMHC was founded in 1946 to help veterans returning
from the Second World War find housing. In 1946, the
federal government created the CMHC to aid in the
management and finance of housing projects in Canadian
cities. It took over the assets of the Wartime Housing
Ltd., that had built thousands of houses during the
war. Upon creation, the Corporation was named the
Central Mortgage and Housing Corporation.
In
1954, the federal government changed the National
Housing Act. The amendment removed the federal government
from the direct finance of housing projects, instead
leaving mortgage financing to the banks. The banks
began to issue mortgage loans. If the individual receiving
the loan went bankrupt then the bank who gave the
loan would not lose money, but instead would be reimbursed
by the government. Now individual families in a multitude
of salary ranges could afford to buy homes.
In
1979, the Corporation's name was changed from Central
Mortgage and Housing Corporation to Canada Mortgage
and Housing Corporation.
Importance in Canadian Public
Sector
The CMHC is the second largest crown corporation
after Canada Post in terms of revenue with some $4.6
billion in 2004. It is the largest crown corporation
in terms of assets with some $26 billion in holdings.
The CMHC influenced the development of Canadian housing
projects (see below). Furthermore, the federal Government
of Canada often uses the CMHC as a financial agent.
Influence over Housing Projects
The CMHC provides assistance and guidance to
the private sector in the building, design and planning
of houses. Thus provincial governments have aligned
their housing standards and planning practices along
those of the CMHC. The CMHC also makes financial loans
to cities at low- and middle-interest rates for the
development of housing projects. Thus, both the cities
and provinces in Canada rely on the CMHC for the continuation
of housing development in the areas under their jurisdiction.
This alignment has had a number of influences on Canadian
housing in general:
-
Development of the policy of every Canadian family
having a home.
- Development of a national building code
- With the insurance of mortgages and 90%/10%
downpayment standard the suburbanization of Canadian
cities was possible
- Building experimental houses for new and improved
building techniques and technology
- Often acts as a developer, but this function
is diminishing.
- Influences the socio-economic differentiation
in cities by approving low-cost housing projects
only when placed where they desire. For example,
the Calgary municipal government wanted to develop
the NE portion of the city as a high-cost housing
market due to the view of the Rocky Mountains.
However, the CMHC, in loaning money to Calgary,
decided that the development should instead be
focused around low-cost housing projects. |
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