The debate about an impending rate hike by the Bank of Canada is getting a little more vigorous.    Speculation about a Canadian increase started to heat up following a boost by the U.S. Federal Reserve on September 16.  The U.S. central bank raised its key lending rate – for the first time in three years – in response to persistent inflation, driven by high oil prices as a result of the U.S.-led war in Iran.    Bank of Canada Governor Tiff Macklem has been clear that policymakers here will follow Canadian data, which is currently different than what is coming out of the…

The debate about an impending rate hike by the Bank of Canada is getting a little more vigorous.    Speculation about a Canadian increase started to heat up following a boost by the U.S. Federal Reserve on September 16.  The U.S. central bank raised its key lending rate – for the first time in three years – in response to persistent inflation, driven by high oil prices as a result of the U.S.-led war in Iran.    Bank of Canada Governor Tiff Macklem has been clear that policymakers here will follow Canadian data, which is currently different than what is coming out of the…

A decline in mortgage borrowing is seen as a key factor in lighter debt loads for Canadians. Statistics Canada’s latest look at the national balance sheet shows that the household debt to disposable income ratio slipped from 178.6% in the first quarter, to 176.4% in the second quarter of this year.  In other words, Canadian households owe about $1.76 in credit market debt for every dollar of disposable income they have. Disposable income is defined as the amount of income that remains after taxes and other mandatory charges, such as mortgage payments and rent, are paid. Total borrowing dropped to $29.4 billion in…

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Consumer debt in Canada has hit a new, record high topping $2.6 trillion in the second quarter.  Credit monitoring firms Equifax and TransUnion put the total at $2.68 trillion and $2.64 trillion respectively.  Both companies report an increase in the number of Canadians falling behind on their payments.  TransUnion says debt levels grew faster than the number of people using credit, with existing borrowers carrying bigger balances compared to the same period a year ago. Equifax notes that Q2 consumer debt increased 1.3% from Q1, and is up 4.18% year-over-year.  According to TransUnion borrowing growth was strongest among consumers with the highest and…

The Canadian Real Estate Association is reporting a fourth consecutive month of gains in the resale housing market.  Sales ticked up 0.5% in July compared to June.  CREA sees it as a sign markets are moving back into balance. “That’s true on the Prairies, in Quebec, and on the East Coast, where a majority of sellers’ markets have been steadily cooling off over the past year.  More recently, it’s also been true of the markets in B.C.’s Lower Mainland and Ontario’s Greater Golden Horseshoe, where formerly buyers’ or borderline buyers’ markets have largely shifted back into balanced market territory,” says CREA…

The housing market seems likely to continue drifting through the doldrums for the next year, or so, according to Canada Mortgage and Housing Corporation.  Ongoing Slowness  The federal housing agency expects that economic growth for this year will come in at a modest 0.7%, supported by consumer and government spending, and improving exports.  But CMHC says uncertainty brought on by the war in Iran and U.S. trade tensions will continue to hold back the economy and, by extension, the housing market.  CMHC expects these conditions could persist into 2028.  Buyers Being Cautious  So far this year, the agency says the housing market has been…

Government spending programs and tax relief initiatives are often criticized as costly and ineffective.  But the current tax break for new home buyers in Ontario is winning praise from two, influential industry groups in the province.  The Building Industry and Land Development Association (BILD), and the Ontario Home Builders’ Association (OHBA) are crediting a joint federal-provincial HST rebate program for a spike in new home sales.  Figures collected by BILD and OHBA indicate a 130% increase in new home sales in the second quarter (April, May, June) compared to the same period a year ago.  “In the second quarter of 2026, there…

An early analysis of the July real estate numbers reveals a “mishmash of realities across Canada’s housing markets,” according to well-known housing economist Robert Hogue.  “Diverging trends reflect different states of confidence, affordability, pent-up demand, demographics, job markets and inventory,” Hogue says in his latest review of local markets.  Vancouver and B.C.’s lower mainland remain mired in a four-year slump.  Home resales dropped 8.0% from June to July.  Prices, as measured by the Canadian Real Estate Association’s Home Price Index, slipped by 6.2% in July compared to a 6.0% decline in June. Affordability and confidence are the big obstacles for B.C. buyers…

The latest statistics indicate the Canadian economy remains resilient in the face of continuing inflation pressures and on-going uncertainty.  But the Bank of Canada has its doubts.  The latest Gross Domestic Product reading shows the economy grew by 0.3% in May.  GDP growth for April was revised upward to 0.6%, while the flash forecast for June came in with a 0.2% boost.  That puts the economy on track for a 3.4% increase for the second quarter, which would be the best quarterly growth in more than three years.  Other indicators look good as well.  The inflation rate dipped 40 basis-points, to 2.8%,…

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Canada Mortgage and Housing Corporation’s latest Housing Market Outlook says home affordability is improving… in some markets.  But the agency does not seem to view these uneven improvements as the big problem.  While CMHC touts better affordability it says “uncertainty, mortgage rates and slow income growth are keeping many buyers on the sidelines.”  CMHC’s summer outlook is forecasting falling prices, slowing sales and reduced construction through the rest of 2026.  The agency expects to see increasing housing market activity through 2027 and 2028 as Canada’s economic growth improves, but levels will remain below long-term averages.  CMHC says one of the most important “knock-on”…

The June report from the Canadian Real Estate Association has bolstered some hope that the long awaited revival in Canada’s housing market may be taking hold.  Modest Improvements  June home sales marked a small, but on-going, increase on a month-over-month basis, rising 0.5% compared to May.  That adds to a 5.5% jump in May and a 0.9% increase in April.  Year-over-year sales were up 0.9% over June 2025.  The national average home price edged up to $696,000, a 0.5% increase from a year earlier.  CREA’s preferred measure – it’s Composite Home Price Index – registered a 3.6% decline on a year-over-year basis.  However, the…

Another interest rate setting and another hold by the Bank of Canada.  For the sixth time in a row the central bank has decided to leave its trend-setting Policy Rate at 2.25%.  “Uncertainty” and the price of oil are the two key factors the Bank is watching but, in the main, it says Canada’s economy is looking stronger.  “Canada’s economy is showing signs of improvement.  Growth is picking up and inflation is projected to ease gradually from its recent spike.  There are still important risks and uncertainties related to the war in the Middle East and US trade policy,” the Bank said…

The latest readings of business and consumer sentiment by the Bank of Canada, show inflation is a top concern.    The Bank’s Business Outlook Survey and its Survey of Consumer Expectations, for the second quarter of 2026, show both groups expect inflation to top 3.0% over the next 12 months.  Concerns are centered on rising energy costs, fueled by the war in the Middle East, and on-going uncertainty about trade with the U.S.  Businesses point to higher fuel prices as a key driver of inflation while consumers tend to see American trade tariffs as the main culprit.  However, an increased number of…

To the surprise of no one the United States has decided it does not want to renew the Canada-United States-Mexico Agreement (CUSMA).  The formal announcement came on July 1 – Canada Day – as per the deadline laid-out in the deal.  So far, the U.S. has not threatened to leave the agreement (neither have Canada nor Mexico), which would require six-months’ notice.    Now the trade agreement will be subject to annual reviews until it expires in 2036, consistent with the ‘management-by-mayhem’ style of the current American administration.  So, uncertainty continues and for those who build and those who buy homes it can…

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The decision makers at the Bank of Canada appear to have felt they had been backed into a corner when they were making the interest rate decision that was announced back on June 10.  The latest Summary of Deliberations shows the Governing Council debating an economic dilemma:  A weak Canadian economy that continues to operate below its potential, combined with high energy prices – caused by the war in Iran – that are pushing inflation above the Bank’s 2.0% target.  If the Bank hiked its Policy Rate to hold down inflation and oil prices suddenly dropped the higher rates would have further…

The annual spring real estate market waited until May to bloom this year but the blossoms are not quite as plentiful as last year.  The Canadian Real Estate Association reports home resales rose 5.5% compared to April, but were 5.1% below May of 2025.  “Like the weather in many parts of Canada this year, the spring market appears to have been delayed by a month or so, but the May numbers left little doubt that activity is now picking up,” said CREA Chair Garry Bhaura.   The most vigorous growth occurred in Ontario with an 8.8% gain over April’s numbers.  The Greater Toronto Area…

The Bank of Canada has held its trend-setting Policy Rate at 2.25% for a fifth straight setting.  The decision was not unexpected but there have been some rumblings about interest rate movement based on the latest GDP numbers, which put the country into a “technical” recession.  Many of those rumblings have been more political than economic.  Bank of Canada Governor Tiff Macklem says the current situation does not meet the bar for a recession.  “Based on the data we’ve seen to date, the economy is weak, but it is not clearly in recession,” Macklem said. “So far, we have not seen a significant,…