TORONTO— The Conservative government must end its egregious policy of charging millions of dollars to housing co-ops to get out of their unduly high fixed-rate mortgages, said Liberal Housing critic John McCallum today.
“Canadian housing co-operatives are being forced to stay locked in to mortgages with exorbitant interest rates – some as high as 13.25% – or face the Conservative government’s exorbitant penalties that would make a loan shark blush,” said Mr. McCallum. “Conservatives are exploiting a decades-old program to treat this affordable housing option as a government cash cow.”
The Canadian Mortgage and Housing Corporation (CMHC), in exchange for allowing housing co-operatives to renegotiate their mortgages, is demanding a penalty equal to all interest payments. Not only is this not a fair market penalty, but there are housing co-ops that are paying fixed rate mortgages three or four times the national average. The result is paralyzed housing co-operatives unable to re-invest in their properties or even perform needed repairs to their facilities.
“Housing co-ops provide a much-needed source of affordable housing to many Canadians,” said Mr. McCallum. “The CMHC has indicated that they are merely following through on government policy. It is the responsibility of Minister Finley and her government to abandon this policy and stop exploiting Canada’s housing co-ops.”