Prior to banks dominating the market, which entity was the largest source of mortgage funding in Canada?

The largest source of mortgage funding in Canada prior to the rise of banks was trust companies. Trust companies were well-positioned to provide mortgage funding because they acted as intermediaries, receiving deposits and then investing those funds in various financial products, including mortgages. They were established with a mandate to manage assets and could offer competitive interest rates.

During their prominence, trust companies played an essential role in providing both short-term and long-term loans, which included residential and commercial mortgages. This positioned them as significant players in the mortgage market until banks began to dominate with their broader reach and greater access to capital.

While life insurance companies, pension funds, and credit unions also contributed to mortgage funding, trust companies were notably influential in the market’s early development. Each of these other entities has its specific strengths and functions in the investment and financial market, but trust companies were particularly crucial in the historical context of mortgage funding before banks took the lead.