Has Conservative Leader Andrew Scheer forgotten what led to the Great Recession of a decade ago, a global financial crisis that vapourized the savings of so many Canadians?

There were financial market shenanigans to be sure — but also risky mortgages, heavy indebtedness and a blind eye by regulators to the risks involved.

After a decade of governments trying to repair the damage, the Conservatives, in their enthusiasm to lure voters with solutions to expensive housing, are now offering up some elements of that reckless mix in the name of affordability.

While no one is suggesting Scheer wants to set off some kind of homegrown subprime mortgage crisis, his housing proposals are problematic.

He is promising to lengthen the maximum term of insured mortgages to 30 years from 25, and cut some slack for first-time homebuyers on the stress test they face to qualify for mortgages, perhaps even removing it entirely for existing homeowners.

Those promises are contentious because they will drive up demand. Essentially, the Conservatives want to unwind the very measures that the federal government has stitched together since the 2008-09 financial crisis to keep Canada’s housing market on an even keel.

It was a Conservative government under Stephen Harper and then-finance minister Jim Flaherty who began the delicate work of confronting overheating in some of Canada’s housing markets, especially Vancouver’s.

In 2010, the Conservatives worked together with regulators to introduce a stress test for buyers, to make sure they didn’t get in over their heads. They also chopped the amortization period for insured mortgages from 40 years down to 30 years, and then again down to the current 25.

When the Liberals came into power, housing markets were still overheating, in Vancouver and also around Toronto. Interest rates were still low, so borrowing continued unabated and household debt levels were becoming alarming. So the Liberals went back to the drawing board, working with regulators to gently remove some of the heat while also trying to prevent a sudden popping of any bubbles that would mean financial devastation for homeowners.

They ramped up the stress tests and tightened the requirements for homebuyers to qualify for insurance on their mortgages. And, along with some provincial measures to target foreign speculation, the heat seemed to slowly seep out of the market.

Crisis averted.

But house prices in some cities are still sky-high, and smaller cities are also seeing their house prices escalate quickly. That means housing affordability is still a big problem, and it has now come to dominate the election campaign.

Realtors say the time has come for the federal government to back off, and they have lobbied hard to allow potential buyers better access into the market.

But they met their match in Evan Siddall, the head of the Canada Mortgage and Housing Corp. He publicly took on the realtors, stuck up for the existing restrictions, and issued a stark warning in the form of a public letter to legislators, saying a removal of the measures would unleash too much demand in an already-precarious market.

“My job is to advise you against this reckless myopia and protect our economy from potentially tragic consequences,” Siddall wrote to MPs in April, referring specifically to 30-year mortgage amortizations and relaxing the stress tests.

The Liberals’ first-time homebuyer initiative works, he said, because it nibbles around the edges of the market and narrowly targets a small segment of consumers who have a down payment at the ready. But as long as household debt continues to mount in Canada, the 25-year mortgage and stress-test measures must remain.

The Conservatives have now picked sides, throwing in their lot with the realtors and against the CMHC and the regulators.

“A lot of things have changed in the housing market,” said Conservative candidate Tom Kmiec, who is running for re-election in Calgary Shepard and was the housing critic in the last Parliament.

The banking regulator and the government have succeeded in putting in many checks and balances to prevent shaky lending practices, Kmiec said, and now potential homebuyers are being forced into alternative lenders’ hands because government rules are too strict.

The Conservatives’ proposals are being met with some rave reviews, but mainly from one source — the real estate industry.

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Is there an easy answer to housing affordability, a package of measures that doesn’t inadvertently drive up home prices or encourage heavily indebted households to take on even more debt?

Economist Jim Stanford points to the supply side of the housing equation. If governments fund far more public housing, co-op housing and rental housing, the rest of the market will be left fairly stable and access to affordable housing will improve.

It’s something the Liberals, the New Democrats and the Greens are talking about, but it’s not a magic bullet. It’s also an expensive approach — although probably not as expensive as unwinding an overheated housing market.

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