A senior official from the Bank of Canada is warning that the government is overexposed to the housing market.

Deputy Governor Lawrence Schembri notes that the market is currently secure with the forecast for more balance when interest rates increase; but he says a sharp rise in unemployment or other economic shock could be costly for the government, especially with the level of risk carried by CMHC.

Schembri says that things have to change with high levels of consumer debt being a major worry, and he has repeated calls for the private sector to take on a greater proportion of the risk.

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