Canada pumps $25B into mortgages

OTTAWA, Oct. 10 (UPI) -- Canada will put $25 billion cash into mortgage-backed securities to shore up banks and lenders, Finance Minister Jim Flaherty announced Friday.

"This is going to make loans and mortgages more available and more affordable for ordinary Canadians and businesses," Flaherty said at an Ottawa news conference, The Canadian Broadcasting Corp., reported.

Flaherty said the problem the country's financial institutions face is not solvency, as in the United States, but the availability of credit.

In the second quarter of 2008, 4.5 percent of U.S. mortgages were more than 90 days in arrears while in Canada the measure was 0.3 percent, the CBC said.

"It is important to underline that Canada's banks and other financial institutions are sound, well-capitalized and less leveraged than their international peers," Flaherty said.

The minister was asked how many Canadian banks were at risk of failure, and he answered "None," the Globe and Mail reported.

Flaherty said the funds would flow through the Canada Housing and Mortgage Corp. and because so few mortgages are deemed at-risk, the government is expected to eventually see a profit, the CBC said.