Interprovincial Mortgage Brokers

Interprovincial-Mortgage-Broker-RegulationThe Internet has made doing business possible across the farthest reaches of the globe. It’s not surprising then, that technology is fostering mortgage brokering across provincial lines.

More and more, we see out-of-province brokers advertising and quoting rates in other provinces. This is making the mortgage market more price-efficient and lowering costs for consumers.

While some brokers may resist this development (and disdain far-away brokers who compete in their vicinity), interprovincial brokering is here to stay and it’s a trend that’s growing.

Interprovincial brokering is being fostered largely by a July 1 revision to the Agreement on Internal Trade (AIT). Since mortgage brokers in Canada are regulated provincially, doing business in other provinces (prior to the AIT) required brokers to jump through some tedious licensing and compliance hoops.

Provincial-Mortgage-RegulationsIn some ways, this kept brokers at a disadvantage to bank reps, who are regulated federally and can do business coast-to-coast. By comparison, brokers have eight regulators with different sets of rules and hurdles. (New Brunswick and PEI have no mortgage brokerage regulation of any kind.)

Fortunately, the AIT is starting to break down regulatory barriers in the mortgage market.

According to FSCO, the AIT is:

“an intergovernmental trade agreement signed by Canadian Premiers. Its purpose is to encourage improved interprovincial trade…and to establish an open, efficient, and stable domestic market.”

Effectively, the AIT enables duly licensed mortgage brokers to gain authorization to do business in another province “without having to complete additional material training, experience, examinations or assessments (or meet residency requirements).” The key is that the brokerage where the broker works must already be licensed there. “There still remain some differences in education courses but they are minimal,” says CAAMP President Jim Murphy.

CAAMP has been actively involved in the process of levelling the provincial regulatory playing field. Last fall at the CAAMP Expo, Murphy told us, “There should be some standardization” among provincial mortgage broker regulations. Since then, there’s been significant progress.

Standardization makes sense on numerous levels. For one thing, notes Murphy, “We call everybody different names. You’re a sub-broker in BC; you’re an associate in Alberta; you’re an agent in Ontario and everybody in Quebec is a broker.”

Differences like that serve no real purpose. All they do is confuse consumers and create compliance and marketing headaches for national brokerages.

In addition to licensing, there’s also been progress on equalizing errors and omissions insurance requirements. Murphy notes that Alberta, Saskatchewan, Manitoba, and Ontario now all follow similar E&O models.

But more can be done; specifically in standardizing disclosures, says Murphy. (As agents who do business in multiple provinces, we enthusiastically attest to the inefficiencies created by different provincial disclosure forms.)

Canada isn’t the only country that is homogenizing its mortgage broker regulations. Australia (which has an analogous mortgage market to Canada in many ways) also recently proclaimed new legislation for mortgage brokers. “The Australian states agreed to upload mortgage brokerage regulation” to the federal level, Murphy tells us.

While federal broker regulation in Canada may be a distant reality, provincial regulators are thankfully easing our burdens and working together. In fact, mortgage broker regulators now meet twice a year says Murphy, who calls that “a positive initiative.” (They meet once during the spring and once during the CAAMP annual conference in the fall.)

All in all, interprovincial brokering is positive for consumers, says Murphy. The more efficient that regulators can make it for skilled brokers to do business nationally, the more competitive the mortgage market will become.

Side note: The AIT for mortgage brokers does not currently include the four Atlantic provinces.

Rob McLister, CMT

  1. Rob,
    Nice to see this is becoming easier for the brokers. We used a broker from newfoundland to do up our mortgage in alberta this past May. Didn’t realize that there was ‘redtape’ for this to be done prior to July 1st. But it went smoothly none the less.

  2. Well, I was told by Quebec licensing that I needed to take a French exam and work under a licensed Quebec brokerage for two years.
    I think that more needs to be done to even up things between Quebec and the rest of Canada. If I can’t license my brokerage in Quebec they shouldn’t be able to just start selling in my territory either.
    This open border sounds like a Disney fantasy, because the reality is that we need to look at Quebec to see they respect the AIT. Otherwise “Bon Voyage” to all the Quebec mortgage people trying to get into Ontario.

  3. :) Quebec is special.
    Do you know that QC language law doesn’t allow a resident of quebec to purchase a hard drive from that have no english manual ? He can, but if shipping address is outside quebec.
    Check FS site : “One or more of the products within your cart is only provided by our suppliers and/or manufacturers in English which is not in compliance with the Quebec language legislation and cannot be shipped within the province of Quebec. Either remove the applicable product(s) from your cart, or change the shipping address to one outside of the province of Quebec.

    again – this is for a hard drive :)

  4. First I’d like to mention how useful this website has been to my husband and I. Thank you for the quality guidance you provide here.
    Secondly, I thought I’d mention that before we came across this site my husband found a broker online. We lived in the U.S. at the time and our broker was from Toronto. I would not hesitate to get a mortgage this way again. Not only did our broker quote the lowest rate we could find, but he provided truly remarkable service. As long as those two criteria are met, he could operate from Nunavut and it would make no difference to us.

  5. July 1 revision to the Agreement on Internal Trade (AIT) will prove to be beneficial to not only mortgage brokers but to the consumer as well. With uniform rules and regulations across the country, mortgage brokers can offer their services to a broader market at more affordable rates.
    Yes, this will increase competition among brokers, but that should only serve to encourage all to excel in the quality of service they offer.

  6. Yes, I visit Quebec every summer and will enjoy taking the French Exam. However, when speaking of mortgages this AIT is allowing Foreign (Yes Quebec it another Nation) to enter our territory easier than we can enter theirs.
    Besides Language, the problem here seems that a mortgage accreditation obtained in Quebec is sufficient to gain a mortgage license in Ontario without further efforts(See AIT) However, mortgage agents with their accreditations from Ontario must go through additional measures to gain a license inside Quebec. (AIT isn’t being followed in Quebec!!)
    It sounds to me that the people from Ontario aren’t being treated fairly, in Quebec.

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