A New Regime for Canadian Covered Bonds

The federal government introduced the Jobs, Growth and Long-term Prosperity Act in April 2012 in order to implement the 2012 federal budget. This statute included amendments to the National Housing Act to introduce a new Part I.1 to the NHA (the "Covered Bond Legislation" or the "Legislation") that establishes a framework for the issuance of covered bonds by eligible Canadian issuers. The Covered Bond Legislation was proclaimed in force on June 29, 2012, but the ability of issuers to issue covered bonds under the new regime was delayed pending rules that had to be established by Canada Mortgage and Housing Corporation ("CMHC"). On December 17, 2012, CMHC published its Canadian Registered Covered Bond Programs Guide (the "Guide"), which sets out comprehensive rules for the issuance of covered bonds under the Covered Bond Legislation.

Reproduced with permission of the publisher of National Banking Law Review, vol. 32, no. 1, February 2013.

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