ECONOMIC & MARKET OUTLOOK
9 things we learned about the economy at the Vancouver Real Estate Forum
“There are decades where nothing happens and weeks where decades happen”: Benjamin Tal, Managing Director and Deputy Chief Economist at CIBC Capital Markets, made his annual visit to VREF to update us all on his economic outlook. Here’s what we learned. 1. NOBODY REALLY HAS A CLUE Opening his presentation with a large question mark on the screen behind him, Tal stated: “You really want me to tell you what will happen. It’s impossible.” He described President Trump as a decision-maker with “no strategy, no GPS. There are notions and those notions are usually false”. The key was to have a long-term view, he said: “Six months from now, will we be discussing the Middle East? Because your business is not about the next quarter, your business is about the next five years.”
Benjamin Tal Managing Director and Deputy Chief Economist at CIBC Capital Markets
2. TRUMP IS THE OZEMPIC OF THE US ECONOMY Trump is shrinking the US economy, said Tal. The US labour market is weak, and low immigration has already reduced economic growth by 0.7%. The housing market is slowing, significantly impacting consumer sentiment. “There is a negative wealth effect; when house prices go down, the consumer spends less.” 3. DIVERSIFYING THE CANADIAN ECONOMY AWAY FROM THE US IS HARD Even with 15 free trade agreements signed with 51 countries, Canada’s reliance on the US rose. “Why?” asked Tal, “because we are closer to the US than to ourselves. I speak to a lot of business people, a lot of CEOs, who tell me it’s easy to say, very difficult to do: ‘We are sorry, we are so connected to them’, that’s why we will not be able to diversify our economic engine in a way that will make a big difference.” 4. THE BANK OF CANADA WILL BE OVERREACTING IF THEY RAISE INTEREST RATES Monetary policy operates with a lag of two years, explained Tal. Raising interest rates now could trigger a recession. “The economy is not doing great. The labour market is softening.
Youth unemployment is rising. At 2%, inflation is not an issue. Oil prices will raise inflation, but that will not derail the economy. Don’t lock your 10-year commitments now because I believe that rates are way too high, reflecting something that will not materialize.” 5. DEVELOPMENT CHARGES WILL GO DOWN t’s the right time for this to happen, and Tal believes development charges in BC and Vancouver will be cut significantly over the next few months. “I’ve been telling the government this is the time to cut the cost of delivering because the Canadian housing market now is too expensive to buy, not expensive enough to build. If we don’t cut delivery costs, we’ll deliver absolutely nothing. The market will clear for the right price, even the condo market. If you don’t, we will face a major shortage in two years. I’m very optimistic about the government starting to move in the right direction.”
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Canadian Real Estate Forums / Spring 2026 8
Canadian Real Estate Forums / Spring 2026 9
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