Government buys an additional $50 billion in insured mortgages

Today, at a news conference in Toronto, Finance Minister Jim Flaherty said the government will buy up to an additional $50 billion in insured mortgages by the end of the fiscal year. That now makes the total amount of money available under the program to $75 billion.

The goal of the program is to encourage lending by taking mortgages off banks' books in exchange for cash.

"At a time of considerable uncertainty in global financial markets, this action will provide Canada's financial institutions with significant and stable access to longer-term funding," Flaherty said. He added that the program "will make consumer and mortgage loans more affordable and more available," and help companies invest in new technologies.

Flaherty stressed that the program involves the purchase of "high-quality assets already guaranteed by the Government of Canada," and said the initiative "will earn a modest rate of return for the government, with no additional risk to the taxpayer.

"It is an efficient, cost-effective and safe way to support lending in Canada at a time of extraordinary strain in global credit markets," he said.

Click here to read more of this article originally printed in The Toronto Star.

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