Joe Taft, CEO of RBC Wealth Management, stated there are three factors that differentiate Canada from the US when referencing the Canadian economy - business practices, regulatory environment and the management cultures at financial institutions. He adds “Canadian home mortgages are not deductible against your income, so there isn't an implicit subsidy of mortgage finance and housing ownership the way it was in the U.S. Most of the mortgages in Canada are also held on the balance sheets of financial institutions. They originate and hold, as opposed to originate and distribute the way it happens in the United States. The consequence of that is that underwriting standards were, in retrospect, a lot more rigorous and more prudent than they were in the United States."
Delving deeper into the the differences in culture, Peter Maris, CFP and Principal at Resource Financial Group stated Canadians “(they) are more conservative as a nation than we are and a lot less greedy.” He continues “They don’t have adjustable-rate mortgages… 90% of the banks hold their mortgage to maturity, whereas in the U.S. a loan is originated and then sold off as soon as possible to get it off their books.”
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