Bank of Canada concerned about debt and housing market

The Bank of Canada is still worried about housing debt levels in Canada and joins the OECD in expressing that concern:

The two biggest concerns on the bank’s radar are also intertwined. It said the growth in mortgage lending in Toronto and Vancouver has largely fuelled an increase in Canada’s overall household indebtedness since the bank’s last review six months ago.

“Highly indebted households have less flexibility to deal with sudden changes in their income,” said the bank.

“As the number of these households grows, it is more likely that adverse economic shocks to households would significantly affect the economy and the financial system.”

The document was released as concerns about the Canadian real estate market — domestically and from abroad — continue to pile up.

Read the full article over at the Financial Post.

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Houses arent for living in. They are to be kept empty, refinanced continuously by owners for cash extraction, and for improvements that can be monitized. Houses are a great source of employment. Workers cant actually afford the house they improve. Many of them opt to live in their vehicles.

Combat roach

British Columbia should have changed name to Brothel Columbia.

B.C Liberals raised over $300,000 in 48 hours after NDP-Green takeover announced

Just me

Disgraceful. And disrespectful of the public that just voted to get rid of donations.
In other words typical Christy Clark behavior.

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Kristy still offering to suck the dicks of her donors in her final days in office if they throw some more cash in her face.

What a pathetic whore.

BC needs to be cleaned up and disinfected after 16 years of being prostituted.


The one housing-market fix that Canada hasn’t tried

Not a bad article, but the headline is ridiculous. There are many obvious fixes at both the federal and provincial level that haven’t been tried, and when the BC government took a step in the right direction, it took measures to reverse it in short order.


Price Change


Abdul Lahazi

This is a clear case of not seeing the forest for the trees, or overthinking the problem. They are too focused on the wrong things; their fake “core inflation rate” but ignoring all the collateral damage they are causing by keeping rates artificially low they are encouraging excessive borrowing and ever expanding real estate bubbles. Both of these are not sustainable and these will eventually collapse back in on themselves. Someday Poloz will be forced by external forces to raise rates and then all hell will break loose because we are already too far in the hole to escape. He should never have dropped lower than 1% and even that was too low.

Combat roach

“Someday Poloz will be forced by external forces to raise rates …”

Bozo will already resign (comfortably) at that point.

Abdul Lahazi

I hope you are right. But his term goes to 2020.


I don’t get the anger at Poloz. Interest rates are a blunt tool. The federal government could place further targeted restrictions on the market to suppress demand, and the provincial government could at least stop adding fuel to the fire. The BoC has an inflation target and that’s what they’re managing; doing otherwise would kill jobs and could be just as bad as a housing correction. That being said, I get the feeling rates are going to start creeping up at the end of the year anyway; the economy has been on a tear and federal stimulus will maintain it.

Shut It Down Already

Exactly. The clowns venting about the BoC have clue what its mandate is.


That’s a good point, I don’t totally blame the BoC for all the issues with housing prices, however the Federal government should have known that leaving the housing market unchecked was a bad idea when the BoC was forced to drop rates to rock bottom to keep the economy going. We needed to see a lot more intervention from the Feds to safeguard Canadians against the inevitable affordability problems in housing that low interest rates would cause. Harper’s Conservatives, and the Trudeau Liberals have mostly been absent on the housing issue, making only superficial changes that haven’t had much impact. The blame should land squarely in the lap of the PMO, it is ultimately their lack of oversight to blame. There needed to be more planning involved for sustained low rates and how to avoid the nasty side effects they… Read more »


I partly agree, but the most important thing the Liberals are doing is the stimulus spending – which helps reflate the economy – and is also something the Cons probably wouldn’t have done. The sooner Canada gets to full employment, the sooner rates rise.

Abdul Lahazi

There are several issues: 1. Inflation figures are not accurate. The BoC has changed how they measure inflation many times over the years to suit whatever spin they want to put on the numbers. Recently, the BoC has actually created excess inflation in some areas by keeping interest rates too low for too long. 2. Interest rates are a blunt tool, yes, but there was no coordination between the various levels of government and the BoC to keep house prices in check. They actually seemed to be operating at odds with each other much of the time 3. The BoC is too focused on exports and keeping to dollar low. Given Poloz’s export background this is not surprising. 4. The BoC should never have dropped rates to 1% let alone less than that. It really did nothing to stimulate the… Read more »

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The whole “inflation targeting” mandate they came up with in the first place is nonsense .

Why does inflation have to be 2%?

What’s wrong with 1%, or better yet 0%?

Just me

Also, it is not obvious what inflation one should target.
Inflation measures the rate of price changes. By that token, one could argue that actual inflation should include and reflect more faithfully the cost of housing. After all, that cost accounts for a large share of family expenditures.
Poloz has allowed asset inflation (especially housing) to go wild. History will look upon with little mercy on his actions.

Shut It Down Already

Deflation, dumbass.

Just me

Deflation? You mean decreasing prices? Depends on what expenditure category you look at. Housing costs have exploded.
In the past ten years the share of a household’s budget going to shelter has ballooned.

Shall we target deflation in flat screen TVs and laptop computers? Is that what determines a household’s welfare?

Go sell some condos, that is your line of work, right?

Best place on meth

You just responded to a lowlife piece of shit who claimed 0% inflation is deflation.

Why do you keep debating vermin who deserve a bullet in the skull?


2% is relatively low but gives a buffer against deflation. If the target was 1 or 0% then any negative economic shock would knock us into deflation and interest rate policy becomes ineffective as you approach zero, and overnight rates can’t really go (much) below zero. There’s a reasonable argument to be made, in light of Japan’s experience and most of the West after the financial crisis, that the inflation target should be ~4%. You’re looking at it from the perspective of this recovery, but where you need the buffer is before the next crisis.

Best place on meth

You don’t get the anger at Poloz?

What the fuck is the BOC rate doing at a riduculous 0.5% EIGHT years after the financial crisis.

Has the crisis lasted 8 years and is it still ongoing?

It should be at 4% by now.

Shut It Down Already

Inflation, dumbass.


The ECB already tried and failed to raise rates. The US has only just started raising rates. Unemployment could still come down a little and the participation rate could likely improve too. Besides the real estate bubbles there’s really no reason to raise rates, and local/provincial governments are in my opinion best placed to deal with it.


I think their counter-cyclical bias is clouding their judgement at the BoC. They can see that our economy is pretty mediocre, so the obvious choice for a Keynesian is to drop interest rates. However, in my opinion, Canadian businesses are not taking advantage of low rates enough to make low rates worth it. They are instead hoarding cash. The cheap money is instead showing up in speculative housing activity, tanking our dollar against the US, and causing random inflationary pressure on some things (food and gasoline for examples). The tough decision that the BoC should have been making is, if the various levels of Canadian governments aren’t going to try and stem the tide of excessive consumer borrowing, and runaway housing costs, would it not be better to raise interest rates, take the short term pain, and destroy some of… Read more »


the BoC will not raise rates anytime soon. the only way this all stops is if employees of banks and other financial institutions are barred from selling more and more “product” to clients who don’t need them, who don’t understand (or read) the fine print and in some cases, are unaware they signed up in the first place. history has proven time and time again that if free crack is offered to a crowd of unsuspecting non drug users that a certain percentage will take the bait and get hooked.