mortgage protection through term life insurance vs mortgage insurance

Whoever told you that is mistaken. Life insurance generally only is paid out when the insured person dies. Mortgage insurance covers the mortgage. If you die or otherwise become unable or unwilling to continue to pay your mortgage payments it will come in effect.

No matter what, they are not interchangeable if the following statement can be understood to mean what it seems to mean.

"If you want to buy a home with a down payment of less than 20%, you’ll need mortgage loan insurance. This protects your lender in case you can’t make your payments. "

https://www.cmhc-schl.gc.ca/en/buying/mortgage-loan-insurance-for-consumers/what-is-mortgage-loan-insurance

This is that last sentence in legalese.

https://laws-lois.justice.gc.ca/eng/regulations/SOR-2012-282/page-1.html

Here is a checklist to see if You are Financially Ready to Own a Home:

https://www.cmhc-schl.gc.ca/en/buying/homebuying-in-canada-a-step-by-step-guide/check-if-you-are-financially-ready-to-own-a-home

I'm not sure, but I think "Non-traditional sources of down payment that increase indebtedness" means, among other things, borrowing from the bank of Mum and Dad. In the last couple of years there's been scares about the extent that people are going into debt in general and specifically in the purpose of real estate. There's been some changes in the last few years to try to prevent people from getting dangerously over their heads. https://www.cmhc-schl.gc.ca/en/media-newsroom/news-releases/2020/cmhc-reviews-underwriting-criteria