policy
06. policy Over the past year, local housing policy has taken a backseat to both provincial and federal economic policies, as well as Bank of Canada market interventions. The primary focus, for good reason, has been on ensuring that households and businesses are supported as we collectively navigate the Great Suppression, with a view to returning to pre-Covid-19 conditions as soon as is possible.
BANKING ON LOW RATES The Bank of Canada continues to have a significant impact on our economy and housing market through their active participation in debt markets and via their decision to maintain the overnight interest rate at its “effective lower bound” of 0.25% (meaning: they have no plans to shift it down to 0%). The Bank of Canada has also been firm in providing its so-called “forward guidance”—
a pedantic way of saying they intend to keep interest rates low for a while. As such, we can expect the overnight rate to remain at 0.25% until the economy is operating at its potential and the annual rate of consumer price inflation sustainably sits above the Bank’s 2% target. In other words, expect interest rates to remain low into early-2023 as the Bank encourages households, businesses, and governments to continue to borrow and spend. As some workers could begin to exhaust their benefits in late March, this increase would ensure continued support as Canada’s economy and labour force recovers. It would also provide additional access to the Canada Recovery Sickness Benefit, so that Canadians do not have to make the choice between going to work sick and putting food on the table.
WITH THE END IN SIGHT FOR COVID-19, MORE FINANCIAL HELP IS ON THE WAY Canada’s federal government has increased the number of weeks of benefits available for the Canada Recovery Benefit (CRB), the Canada Recovery Sickness Benefit (CRSB),
the Canada Recovery Caregiving Benefit (CRCB) and Employment Insurance (EI) regular benefits.
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