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Abstract
This report analyzes the impact of several recent events on Canada Mortgage and Housing Corporation's (CMHC) mortgage insurance sales for single dwelling homes in each of the Atlantic provinces. In particular, it focuses on the impact of the First Home Loan Insurance (FHLI) program, the change in Registered Savings Plan (RSP) tax policy, the loss of Mortgage Insurance Company of Canada (MICC) as a competitor and the entry of General Electric Capital Mortgage Insurance Canada (GECMIC) into the market. Autoregressive Integrated Moving Average (ARIMA) models are developed to provide ex post forecasts of sales trends previous to the above mentioned events. The forecasts represent "what would have been" had the events not taken place. Comparing "what would have been" to "what was" allows the magnitude of the events to be assessed. On average we find that the FHLI program and the RSP tax policy change increased CMHC's mortgage insurance sales by 18 percent for existing homes and 8 percent for new homes. We also found that the exit of MICC caused a 16 percent increase in mortgage insurance sales for existing homes and a 30 percent increase for new homes, and that the re-entry of GECMIC also influenced CMHC's sales.
