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Benjamin Tal, deputy chief economist with CIBC, said alternative lender statistics do not include credit unions and would be made up in large part by mortgage investment corporations that have become popular with investors looking for a place to park their cash and get a significant yield.

“It’s a small segment of the market still, but it is rising quickly,” said Mr. Tal, who used tax data and balance sheet and income statement information of non-depositary financial institutions as a proxy for alternative lenders.

Subprime loans have been partially blamed for the collapse of the United States housing market and the 2008 recession, and Mr. Tal says there is little doubt the loans in the alternative lending space are subprime ones that none of the major lenders will take.

“But remember subprime can be someone like a plumber,” he said, referring to self-employed workers, a segment of the market that Canada Mortgage and Housing Corp. has mostly abandoned when it comes to backing loans. “You should also remember that sub-prime is a normal part of a healthy functioning market. The U.S. was able to function with 5% of the market [in sub prime loans] for 40 years with no problem, [but] when it goes to 33%, that’s a problem.”

Among the factors bolstering non-bank mortgage lenders in Canada is that the country’s big banks have been tightening lending standards in response to moves by the federal government and CMHC to try to rein in household debt and cool the housing market.