The Canada Mortgage and Housing Corporation (CMHC) is the federal Crown corporation responsible for administering the National Housing Act with the stated mission of improving housing and living conditions in Canada. Yet its policies—shaped over decades of Liberal governments—have arguably distorted the housing landscape.
From Rentals to Condos
During Jean Chrétien’s Liberal era, the government leaned into Pierre Trudeau’s vision of expanding homeownership. Instead of prioritizing rental housing, however, development incentives shifted toward condominiums.
This was not simply CMHC’s doing. Developers saw higher profits in condos than in houses or rentals. Maintenance fees became a kind of “rent by another name,” ensuring steady revenue streams for builders and investors. The result? Rather than serving real housing needs, the industry began to create its own artificial market.
Canada’s Cash-Flow Negative Economy
Overlaying this is the reality of Canada’s broader economic framework. Between carbon taxes, heavy regulation, and escalating public debt, Canada has become what can fairly be described as a cash-flow negative economy. In practical terms, for every $100 invested in the real economy—building, production, or infrastructure—you might only see $75 in return, meaning you’re losing $25. By contrast, financial speculation or buying stocks can yield better results, since real-world productivity is penalized by government policy.
Thus, when Canadians saw rising home prices, many mistook this for wealth creation. In truth, it was a signal of a debased currency. Prices were climbing not because of sustainable demand, but because the purchasing power of the Canadian dollar was shrinking.
Why Prices Haven’t Collapsed (Yet)
CMHC’s role explains why Canada has avoided a full-blown housing crash so far. The agency operates on both sides of the equation—supporting mortgage-backed securities and providing mortgage insurance.
For example, when buyers can put just 5% down on a condo they otherwise couldn’t afford, CMHC insures that loan. This inflates the condo’s market price, creating the appearance of demand. New buyers then pay a premium to enter the market, banking on currency debasement eventually catching up with today’s inflated prices.
But this “market” isn’t a free market—it’s a propped-up system dependent on CMHC and federal policy.
Cracks in the Condo System
The problem now is cash flow and illiquidity. Owners stretched thin by mortgages and fees are exiting the market. As demand weakens, condos could increasingly revert to rental units—a dynamic seen before in the 1990s housing downturn.
Even CMHC acknowledges the parallels. In a new report, the agency notes that Toronto’s condo market shows similarities to the crash of the early ’90s. Prices are declining at comparable rates, though CMHC predicts the downturn will be shorter this time, thanks to:
- A more diverse and stable economy.
- Stricter lending rules (e.g., the mortgage stress test).
- An underlying housing shortage in the Greater Toronto Area.
Still, with condo starts sharply declining in 2025, the pipeline of new units after 2026 will be far thinner. That suggests stagnation rather than recovery.
The Bigger Picture
At its core, Canada’s housing “market” was never organic demand—it was manufactured demand, inflated by subsidies, regulations, and CMHC’s dual mandate. Now that demand is cracking under economic reality, Canadians are being reminded that speculative growth cannot substitute for true productivity.
Conclusion
Canada Post, CMHC, and other Crown corporations reveal the same truth: when government tries to control markets, inefficiency and distortion follow. A real economy is built on value, not manipulation.
And as Christians, we remember that no government policy can substitute for God’s wisdom. Christ teaches stewardship, accountability, and honesty—principles absent from much of today’s economic system. True liberty and prosperity flow from Him, not from manipulated markets or political agendas.
Consider making Jesus Christ your Lord and Savior today. Governments and markets will fail, but Christ never fails.