The Harper government is "floating trial balloons" over the possible privatization of Canada Mortgage and Housing Corporation, according to published reports.

The Globe and Mail quotes one Bay Street source as saying the impetus for the move is coming directly from the office of Finance Minister Jim Flaherty.

Neither the minister's office nor CMHC would comment on the report.

The paper says a sale is not imminent and would not likely occur before the next federal election. It also says there is no clear-cut case for privatizing the federal housing agency.

The lure is thought to be CMHC's lucrative mortgage insurance business. The crown corporation is raking in about $1 billion a year in profit and is sitting on a reserve of $5 billion that is expected to grow to $9.5 billion within four years.

The paper says privatizing CMHC is likely to raise alarm bells with social housing advocates, who want to see the surplus used to finance low-cost housing. One possible solution would be privatizing CMHC's commercial operations, while maintaining its social housing components within the government.