Not everyone in the Conservative cabinet is backing Jim Flaherty’s latest intervention in the mortgage market.
Small Business Minister Maxime Bernier believes the finance minister overstepped his bounds by having his office phone Manulife Financial (TSX:MFC) and ask they withdraw their discount on five-year mortgages to 2.89 per cent from 3.09.
Bernier told reporters Wednesday he would not have done it.
“Me, personally, I would not dictate to businesses what prices to decide,” he says.
“It’s the market. It’s supply and demand that decides the prices. It is the case for interest rates, it is the case for other products too.”
Flaherty came under attack Tuesday from opposition leaders who accused him of interfering with decisions of private businesses acting under the rules he set, and of making it more expensive for Canadians to purchase a home.
In a statement, Manulife said it had restored the higher rate “after consulting with the Department of Finance.”
It was not the first time Flaherty has intervened in the financial sector.
Earlier this month, the minister personally phoned the Bank of Montreal (TSX:BMO) to complain about its decision to lower the five-year rate to 2.99 per cent. BMO did not reverse its position after the call and the rate remains unchanged.
