A severe global economic depression could cut Canadian housing prices by 25 per cent and push unemployment to 13.5 per cent, according to stress testing done by Canada Mortgage and Housing Corp. (CMHC).

But the federal housing agency says it could withstand the $3-billion loss it would suffer under that scenario — one of several tested to ensure CMHC’s mortgage insurance and securitization businesses can withstand a severe economic storm.

The results aren’t considered predictions or forecasts and the extreme scenarios that CMHC models “have a very remote chance of happening,” said chief risk officer Romy Bowers.

The tests demonstrate that CMHC has the capital requirements to weather a serious financial storm, said Jason Friesen of Verico Premier Mortgage Centre Inc.

“It helps pacify taxpayer risk that CMHC could collapse should any market dynamics shift at all. It really doesn’t have an immediate or direct impact on any bank decisions as they will also analyze their own exposure and risk to any serious changes to the markets,” he said.

This week Canadian lenders bumped mortgage rates due to a rise in bond yields in the wake of Donald Trump’s election to the U.S. presidency.

On Wednesday, TD announced it had raised its special rate offer for a four-year fixed mortgage by five basis points to 2.44 per cent and for a five-year fixed mortgage by 10 basis points to 2.69 per cent. The changes apply to all amortization periods.

The day before, RBC lifted its five-year fixed rate mortgage 30 basis points to 2.94 per cent and its four-year rate to 2.79 per cent. Borrowers with amortization rates longer than 25 years are paying more.

RBC’s 2.94 per cent is a much higher rate than most consumers would likely negotiate if they walked into a branch, said Friesen.

“There are still some lenders offering 2.39 per cent for five years fixed, so while it is a shift upward, the jumps were not substantial,” he said.

Among the scenarios that CMHC also tested was a U.S.-style housing correction. It found that a 5 per cent increase in unemployment with a 30 per cent drop in home prices would result in a $2 billion loss.

Canada won’t experience a crisis like the one that happened in the U.S., said Dianne Usher, senior vice-president of Royal LePage’s Johnson & Daniel division.

“We’re just not governed the same way. It’s very much a non-issue,” she said.

Rising mortgage rates may deter some Canadian buyers, probably in smaller communities, but not in the active Toronto area market, said Usher.

She said the federal government’s attempts to influence affordability with new mortgage qualification rules have also failed to make a difference in the Toronto region.

“It hasn’t impacted at all and it certainly won’t impact at the higher end (of home prices). What it might mean for the more entry level, more affordable housing price, instead of 10 offers on a piece of property we only get eight offers and instead of going 10 per cent over asking we’re going to go 9 per cent over asking,” Usher said.

As long as the demand remains intense, the market will continue to rise, she said. Foreign investment will also continue to drive demand as Canada’s banking system and social strengths appear attractive on a global basis.

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“We’re safe, our government is very, very strong. We’ve got a good health care system in most parts of the country. We’ve got great hospitals, great schools. Unless something beyond the borders of Canada has a catastrophic effect I don’t see it changing any time soon,” she said.

The Canadian real estate industry isn’t expecting Trump will have any effect here, said Usher.

With Files from The Canadian Press