Evan Siddall, president and chief executive officer of the Canada Mortgage and Housing Corporation (CMHC) sits down with the Globe and Mail for an interview on June 16 2014.Fred Lum/The Globe and Mail
Canada's national housing agency is at odds with the finance minister over what to do with our national housing bubble!
That makes one heck of a story. Would that it were true – not from a government-in-crisis point of view, but at least from the standpoint of selling newspapers and creating clicks.
On Friday, Canada Mortgage & Housing Corp. chief executive officer Evan Siddall said he is looking at methods of shifting some risk from housing loans to the banks. It's not the first time he's mused on such things. Still, reporters ran to ask Finance Minister Joe Oliver what that means, exactly. Guess what? Mr. Oliver said the government is not considering such things any time soon.
The government's housing-policy left hand appears to not know what the right hand is doing. One major media outlet suggested Mr. Oliver "played down" the notions that Mr. Siddall put forward.
The media loves a good clash, a narrative featuring different arms of the government at odds, of mixed messages. This is not that. At least, not yet.
This is really the result of a very different leadership style at Canada Mortgage & Housing Corp. coming up against political realities. Where once CMHC didn't say much about anything, appearing to simply do the government's bidding, Mr. Siddall's style is much more open.
He wants to try out policy ideas. He is much more likely to publicly test an idea that's earlier in its gestation than a CMHC chief ever would have considered mentioning before.
In other words, just because he says he's thinking something, it doesn't mean it's going to happen imminently. And that's what Mr. Oliver drove home – there's nothing happening at this point.
Mr. Siddall's style presents plenty of possibility for friction.
Mr. Siddall is thinking out loud about what he is advising the government on doing. And for a government that is not all that open by its nature, and which is crafting an election budget, that is going to create an interesting dynamic.
For the federal Conservatives, stewardship of the real estate market is a key talking point in the lead-up to an election next year. They will want to ensure that nothing from the housing sector derails the economy, while at the same time trumpeting the moves the government has already made to lower housing risk. In other words, don't look for a lot of big changes on home lending policies unless the housing market forces them.
At the same time, Mr. Siddall is undoubtedly going to keep talking about ideas for change.
He wants to publish more and more of the data on which CMHC bases its analysis. He wants people to try to pick holes in CMHC's reasoning. Compare that to the government's attitude on keeping other information close to its chest, or shutting down the long-form census.
This is a guy who wants to essentially crowd-source his risk management strategy, to ensure CMHC is not missing something when it concludes, as it has in the past, that while housing is overvalued, there is no worrisome bubble.
Mr. Siddall frets about what Black Swan author Nassim Nicholas Taleb calls "unknown unknowns" and wants to "recruit others to share in the cause" of finding out what the unknowns are. "Information diffusion is a key tactic in promoting a community of risk management."
What if those data raise questions about how Ottawa has handled the housing market so far? Mr. Siddall might consider that a boon. Mr. Oliver and Prime Minister Stephen Harper? I'm not so sure.
CMHC has only one shareholder. Whether the federal government can live with the openness of one of its key hires at one of its key Crown corporations will determine how this plays out over the long term.
Mr. Siddall is taking a decentralized approach to information in a very centralized government. It's not a clash yet, but it sure could be.
So will Mr. Siddall quiet down? Not likely. Nor should he. It's the right approach.