Ottawa gives social housing operators more flexibility to re-finance

OTTAWA – The federal government has finally granted social housing operators some flexibility to borrow money on the open market.

Housing co-ops have been lobbying Ottawa to allow them to opt out of their government-backed mortgages and seek long-term financing on commercial terms so that they can pay for renovations and upkeep.

Usually, commercial terms are more expensive than government-backed mortgages, but some co-ops are locked into higher-rate mortgages that date back to the 1980s.

Ottawa wanted to charge them huge penalties to get out of those arrangements and set up new deals with the private sector — even though Ottawa is gradually pulling out of the social-housing mortgage business.

Now, Human Resources Minister Diane Finley has conceded and will only charge penalties in line with those levied by commercial banks.