The clause matters because a pre-approval and a full approval are not the same thing. A pre-approval qualifies the buyer and holds a rate, but the property still has to clear underwriting against CMHC's guideline ratios, roughly 39 percent of income for housing costs and 44 percent for total debt, and usually an appraisal, and the financing condition protects the buyer during that gap.
Once the condition is satisfied or removed in writing, the buyer is committed. If financing then falls through, the deposit is at risk and a seller who resells for less can pursue the difference as damages, a claim that lands at the Court of King's Bench rather than getting sorted out informally.
Joel Dyck lines up a buyer's lender before writing an offer, so the condition period reflects a realistic timeline rather than a guess. Get your hand-reviewed valuation from Joel Dyck.