Global Banking and Markets Overview

Housing Policy Developments in Canada Consistent policy initiatives to maintain a balanced and sustainable market 2016 2017 2018 2019 . . . • . Canada: Qualifying stress rate for all new mortgage insurance must be the greater of the contract mortgage rate or the Bank of Canada's conventional five-year fixed posted rate Low-ratio mortgage insurance eligibility requirements updated for lenders wishing to use portfolio insurance: o Maximum amortization 25 years 。 CAD $1MM max. purchase price o Minimum credit score of 600 。 Owner-occupied property Elimination of primary residence tax exemption for foreign buyers Min. down payment on insured increased from 5% to 10% (for homes CAD $0.5-$1.0MM) British Columbia: 15% land transfer tax on non-resident purchases in Metro Vancouver introduced Ontario: 16 measures aimed to slow rate of house price appreciation Key aspects include: ○ 15% non-resident speculation tax o Expanded rent control to all private rental units in Ontario 。 Vacant home tax CAD $125MM five-year program to encourage construction of new rental apartment buildings • Canada: OSFI imposes more stringent stress tests for uninsured mortgages, including a minimum qualifying rate at the greater of the five-year fixed posted rate or the contractual rate plus 200 bps, effective January 1, 2018 • Ontario: Elimination of rent . control on new rental units first occupied on or before November 1, 2018 British Columbia: Extension of the Property Transfer Tax on non-resident buyers. Investment of more than CAD $1.6B through FY2021 toward the goal of building 114,000 affordable housing units in the next 10 years • British Columbia: Increase in speculation tax on foreign and domestic home owners who do not pay income tax in BC from 0.5% of a property's assessed value to 2%; additional school tax levied on portion of a property's value that exceeds CAD $3MM Scotiabank® 42 42

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