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“We’re going to continue to lobby for a pullback now on B-20,” Brad Carr, chief executive officer of Mattamy Homes Canada, said in an interview at Bloomberg’s Toronto office. “That had a very targeted outcome. It’s been achieved so it’s kind of overkill now.”

As rates rise “they’re doing their natural job and that 2 per cent spread, we certainly hope the government will either remove it or at least cap it,” Carr said. Peter Gilgan, founder and CEO of Toronto-based Mattamy Homes, added that a reduction to 1.5 per cent or 1 per cent would make sense.

“Ideally at this point the best thing would be for the new stress test to be repealed, just removed,” David Foster, director of communications at the CHBA said. “Markets like Calgary, they’re already quite soft, are just hammered by this.”

Foster said the restrictions are disproportionately affecting young first-time buyers and the longer the rules are in place the more disenfranchised that age cohort is going to be. The stress tests also perversely tend to push people into open variable rate mortgages or the non-regulated space, neither of which are without significant risk to the borrower, he said.

A spokeswoman for the Office of the Superintendent of Financial Institutions said it wasn’t able to immediately respond.

Bloomberg.com