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Conservative sources say that Finance was always very keen to tighten the terms for government-backed loans when they were in office but their commitment to home ownership persuaded them to hold off, even as they tightened rules on mortgage amortization lengths to 25 years from 40.

Liberal sources suggest the new government has been persuaded that it has to act — before interest rates start to rise.

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The Liberal platform said the party would review escalating home prices in Toronto and Vancouver “and consider all policy tools that could keep home ownership within reach for more Canadians.” While this may have sounded as if the Liberals wanted to relax lending conditions, recent evidence has convinced them there is a need for regulatory tightening.

A new report by the C.D. Howe Institute (an organization the new finance minister, Bill Morneau, used to chair) quantifies the problem.

Authors Craig Alexander and Paul Jacobson refer to “pockets of risk” in the housing market in their paper, Mortgaged to the Hilt.

The paper suggests the ratio of the value of mortgages in primary dwellings has jumped to 204 per cent of after-tax income in 2012, from 144 per cent in 1999.

It also suggests that one in five homeowners have less than $5,000 in financial assets to draw upon in response to lower income or higher debt servicing costs. One in 10 has less than $1,500 in available assets.

Higher interest rates are coming and the data suggests many Canadians don’t have the financial resources to cope.