Scotia’s Global Markets Chief Sees Role for Banks in Canada Housing Crunch

(Bloomberg) -- The head of Bank of Nova Scotia's wholesale banking and markets business said there's no easy fix for Canada's housing affordability problem, but that both banks and government will need to play a role in solving it.

Price increases have accelerated in recent months because of pandemic-related factors such as low interest rates and increased demand for second homes, said Jake Lawrence, head of Scotiabank's global banking and markets business.

While there is no “silver-bullet solution,” a concerted push is needed to boost housing supply, he said.

“We need all levels of government -- municipal, provincial and federal -- to work together to ease obstacles to construction for all forms of housing,” Lawrence said. “Whether it's affordable, whether it's rentals or owned accommodations, a key step is getting more supply in the market.”

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Lawrence spoke a day after Scotiabank announced a commitment to provide C$10 billion ($8 billion) in support of efforts by the Canada Mortgage & Housing Corp., the nation's housing agency and main provider of mortgage insurance, to improve housing affordability.

Scotiabank's pledge will entail a range of activities, from programs that help individual customers purchase homes to providing corporate builders with bank facilities or placing larger financing vehicles with investors, Lawrence said.

The lender's Sustainable Finance Group also will help issuers in the housing industry develop social bonds to finance projects, he said.

“We remain committed to try and make sure that the financing solutions are there, the credit is available, that we're supporting corporates who are helping bring supply to the market and that we are providing financing to people who want to buy that supply,” Lawrence said. “That's what we can contribute to this challenge right now.”

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