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Zero-Down Payment Mortgages: Can We Solve Two Problems With One Program?
Recent data from Statistics Canada reveals a significant gap in net worth between retirees who own their homes and those who don’t, highlighting the critical role of homeownership in building Canadians’ financial wellbeing. Yet, many Canadians face steep challenges in purchasing their first home, with a large number liquidity-constrained and unable to save enough for…
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Monetary Policy: What’s the Next Move?
While both the Fed and the Bank of Canada are easing rates, the pace of cuts is expected to vary. The US is on a slower path to lowering interest rates due to several factors. The US economy has been less sensitive to rate hikes as many consumers and firms locked in low interest rates…
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Examining the Conservatives’ Plan to Eliminate the GST on New Homes Under $1 Million
The federal Conservatives recently announced a plan to abolish federal sales tax on new homes under $1 million if elected, with the goal of encouraging the provinces to follow suit. A report from the Canadian Centre for Economic Analysis (CANCEA) found that in Ontario, over 31 per cent of a home’s purchase price is tied…
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Reversing Course on Immigration
The era of explosive population growth has come to an end. The federal government has released updated immigration planning targets that point to a net outflow of newcomers over the next two years. Rapid population growth has been linked to an unaffordable housing market, concerns about social services and infrastructure capacity, and slack in the…
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Flood Reinsurance: Wading into the Deep End
In Budget 2023, the government unveiled plans for a national flood reinsurance program and a separate insurance subsidy for high-risk households. Budget 2024 expanded on this by proposing a Canada Mortgage and Housing Corporation (CMHC) subsidiary to deliver the flood reinsurance program, but the announcement was light on both details and funding. Budget 2024 proposes…
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Beware the Bond Vigilantes
In the early part of my career, I worked in government debt management, initially focusing on forecasting federal deficits and debt, and then later financing it through treasury bill and domestic and foreign debt issuance. This was during a period where inflation was rampant, and government spending was largely unchecked. The current fiscal situation in…
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Overcoming Inertia in the Housing Finance System
Government institutions operate under the assumption of permanence, leading to a deep-seated resistance to change. Below, we highlight areas where simple action by the federal government could improve our housing finance system and improve affordability. Canada Mortgage Bond (CMB) Repo Facility When the federal government announced its intention to buy $30 billion—half the issuance of…
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