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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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The Case for a 50 Basis Point Cut by the Bank of Canada
In a recent CIBC podcast, Paul Beaudry, the former deputy governor of the Bank of Canada, advocated for a half-percentage point cut to the overnight rate later this month. He argued that “when you want to turn things around, you want to get the confidence going.” Policy action of this scale could significantly boost confidence…
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Encouraging More Secondary Suites – How Hard Could it Be?
To achieve the federal government’s housing targets, a major increase in housing construction is essential. Since most projects take up to seven years to complete, progress has been slow, leaving the government struggling to show any measurable signs of progress on increasing the housing stock. One of the goals of the Housing Accelerator Fund (HAF)…
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Strong Jobs Number Signals Slower Pace of Fed Easing
The September jobs report revealed stronger-than-expected job gains of 254,000, quelling fears of a sharp labor market slowdown. This figure easily surpassed all analysts’ forecasts on Bloomberg and beat the consensus estimate by over 100,000 jobs. In addition, upward revisions added 72,000 jobs to the previous two months, while the unemployment rate ticked down to…
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Unlocking Efficiencies in the Canada Mortgage Bond Program
The federal government’s recent policy announcement signals a clear intent to be more flexible in its housing finance policies and programs. Below we discuss key areas of change where CMHC, with support from the Department of Finance, could improve the funding efficiency of the Canada Mortgage Bond (CMB) program and expand mortgage funding volume without…
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Is a 50-Basis-Point Cut in the Cards for October?
Canadian real GDP managed to rise 0.2 per cent in July, slightly better than expected, but the early read for August points to no growth, according to Friday’s data release from Statistics Canada. Assuming some GDP growth in September, this suggests annualized growth for the third quarter of around 1.3 – 1.4 per cent. This…
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