CANADA URGED TO TIGHTEN MORTGAGE RULES
The Canadian Press Date: Thursday Feb. 11, 2010 6:56 AM ET OTTAWA — The federal government should avoid major surgery and make only minor adjustments to deal with fears of overheating in Canada's housing market, a number of leading economists said Wednesday. Federal Finance Minister Jim Flaherty and the Bank of Canada have expressed concern that Canadians may be assuming too much debt in home purchases, debt that could rebound on them when interest rates rise. But some solutions being floated in advance of Flaherty's upcoming March 4 budget -- doubling the minimum down payment to 10 per cent, or reducing the maximum amortization period from 35 to 30 years -- could do more harm than good, the economists said. "We want some sort of micro-surgery, not (taking) a pickaxe to the problem," said Avery Shenfeld, chief economist with CIBC World Markets. Bank of Nova Scotia economist Derek Holt said such radical surgery could cause home prices to crash and shake confidence in t