21 May 2014

During the previous year the BoC Governor Stephen Poloz turned the bank’s focus away from rising housing debt level to an extremely low inflation amid excess economic capacity. Mr. Poloz restrained the central bank’s plans to raise interest rates in October.

As you know, Canada’s inflation rate hasn’t exceeded the Bank’s 2% target since February 2012. Soon, on May 23rd, Statistics Canada will report April inflation data. Now economists expect 2% inflation for the first time in 2 years.

The influence of the Bank of Canada’s policy change has made commercial banks decrease mortgage rates, even while the government tightened mortgage rules in order to protect consumers that are most vulnerable to housing prices corrections.


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