In a stark assessment of Canada’s economic landscape, Bank of Canada Governor Tiff Macklem has raised concerns that the federal government’s spending is not supporting the central bank’s efforts to rein in high inflation and interest rates. The situation has significant repercussions for the Canadian economy, particularly impacting mortgages and homeownership.
Macklem emphasized the need for fiscal and monetary policies to work in tandem to effectively combat inflation. However, the current economic approach by the government is drawing scrutiny over its impact on Canadians’ ability to secure affordable mortgages. The Bank of Canada’s aggressive strategy to quell inflation has involved hiking interest rates ten times within a span of 19 months. This measure has led to a substantial increase in mortgage payments, which have skyrocketed by 150% since 2015 for an average family home.
The financial strain on Canadian households was highlighted in a survey by Edward Jones Canada, which pointed out the growing stress among citizens due to the current economic conditions. Adding to this, a community-wide mortgage survey conducted by MP Tracy Gray revealed that many respondents are struggling with their mortgage payments. The survey indicates a concerning trend of increased mortgage defaults and forced sales, with some individuals fearing the loss of their homes due to unaffordability.
Despite promises made back in 2015 by the Prime Minister to enhance the availability of affordable housing, the reality has been starkly different. Since then, rents, mortgage payments, and down payments have all doubled. Compounding these challenges is a report from the Canada Mortgage and Housing Corporation indicating a decrease in housing starts nationwide. This decline exacerbates the housing crisis and reflects poorly on the government’s ability to follow through on its commitments.
For those who fail to meet stringent mortgage stress tests but are desperate to retain their homes, high-interest alternative lending has become an increasingly common recourse. Additionally, construction costs have surged due to high interest rates and a weak Canadian dollar, placing further pressure on Canada’s housing market.
In light of Remembrance Day, Tracy Gray urged Kelowna-Lake Country residents to honor veterans by visiting Kelowna’s City Park’s Field of Crosses memorial and purchasing poppies to support local veterans and their families. Gray also shared a Remembrance Day video tribute from the National War Memorial in Ottawa through her social media platforms.
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