16 February 2011
But the C.D. Howe Institute wasn’t the only critic Stewart opposed. He also sent a letter to David Madani (Capital Economics) who predicted that housing prices will go down by 25%-35% during the next two years. In his opinion, “this decline will affect CMHC greatly”. According to his calculations, it can lead to serious financial losses for CMHC – approximately $10 billion. He said it will be enough to wipe out all of CMHC equity.
Douglas Stewart disproved the assumptions used by Madani in his calculations: Stewart said CMHC’s total insurance-in-force is $473 billion, not the $800 billion mentioned in Madani’s report. In this case the calculation’s results are absolutely different.