BC Premier John Horgan called out Canada’s financial institutions today on their role in ensuring homeowners are provided with the necessary temporary mortgage payment relief they need to get through the economic downtown as a result of the coronavirus pandemic.
“I’ve been hearing, regrettably, that some banks and financial institutions are not as enthusiastic about living up to the challenge we have in front of us,” said Horgan during Wednesday’s press conference on pandemic housing measures.
“So I’m calling on banks and financial institutions to work with mortgage holders to make sure we’re doing everything we can to get through this difficult time.”
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This comes after the federal government’s request earlier this month to provide mortgage relief to Canadians, which was met with a joint response by the country’s six largest banks on March 17.
Bank of Montreal, CIBC, National Bank of Canada, RBC Royal Bank, Scotiabank, and TD Bank have agreed to provide “up to a six-month payment deferral for mortgages, and the opportunity for relief on other credit products.”
But this is to be done on a “case-by-case basis” to help them manage through COVID-19 related challenges, including pay disruption, childcare disruption due to school closures, or those facing illness.
There is also uncertainty over whether deferrals would provide actual relief, such as a scenario where they would pay less or nothing during the crisis, but would end up paying more over the mortgage term due to added interest.
There could either be higher payments when the payment period resumes or a larger overall mortgage payment.
Other unknowns with mortgage deferrals relate to whether the banks will consider mortgage deferral requests based on a property owner’s hardship from tenants who have stopped paying their rental income because they have had their hours cut back or were laid off.
Spokespersons with the banks were not immediately available for comment.
The provincial government’s $500 monthly relief supplement from BC Housing over the next three months is intended to provide some rental payment assistance for low- and middle-income tenants.
“For those who are providing rental housing, we want to make sure we are working with you. Those rent cheques are critical to your families as well, critical to your ability to make payments,” said Horgan.
While $500 alone provides little relief given BC’s average market rental housing costs, especially within Metro Vancouver, Horgan believes that it will be effective in conjunction with the one-time, $1,000 cheques that will be sent to people who have lost their jobs in BC, as well as the federal government’s $900 bi-weekly cheques for up to 15 weeks for those who do not qualify for Employment Insurance, and other relief measures such as interest-free freeze on student loan payments.
“No one is going to lose their home, we’re going to put some resources into the pockets of people so that we can keep the economy going,” he continued.
Selina Robinson, BC Minister of Municipal Affairs and Housing, also asked tenants and landlords to work together on an amicable solution for their situations.
“We’re going to ask that tenants and landlords talk to each other about how to pay rent,” she said. “The supplement that we’re proposing with this new program is intended to help address this shortfall. Many landlords, especially families with secondary suites, also depend on rental income to pay their bills.”
Horgan added: “You have a relationship with your landlord, let’s all hope they’re good relationships.”
He also called the current measures “a start” and hinted that he is open to additional policies and relief should it be required.