I am not part of the everything government says is a lie crowd, but understand the skepticism. But when you look at this report in conjunction with other economic data coming out of Canada recently, it is plausible.
Substantial decreases in the value of Canadian housing was essentially deferred by extremely cheap money during the past 6-9 months (e.g. 5 yr rates as low as 3.75%). The market was pretty weak during late 2008, and it wasn't just the beginning of the recession that was causing it. One would think that we would possibly learn from the housing bubble in the US, but instead we have gorged on cheap interest rates, propping up the Canadian housing market, while simultaneously dramatically increasing our consumer borrowing in the middle of a recession. We have had plenty of subprime lending in Canada - at least one of the Canadian banks is in fact a significant indirect player in that market (at lower LTVs), a number of US companies were operating in Canada for quite some time (e.g. GMAC, GE Money). There is also a fair bit of arguably questionable lending that CMHC endorses (e.g. high-ratio stated income products for self-employed, to name one). Let's see how things develop once cheap money is removed from the Canadian mortgage market...
Interesting article on the Globe and Mail website: CMHC's growth fuels worries over new risks Ottawa raises federal agency's mortgage insurance cap to $600-billion from $450-billion http://www.theglobeandmail.com/repo...-fuels-worries-over-new-risks/article1327491/