Last Wednesday, the Bank of Canada raised its overnight lending rate to 3.75%, up half a percentage point. Which means, Prime Rate is now 5.95%.
Think about how to manage your unsecured debts and mortgage debts if you need to pause and take a look at your finances. A specialist may be able to help you either consolidate existing debt or even consider selling your property if things become unmanageable if finances are tight.
Again, a large percentage of Canadian homeowners are mortgage free, and according to big bank data, many had loans that were around 50% loan to value during the pandemic, which means those borrowers should still have a wealth of equity in their properties.
Those who purchased during the last three years with minimal downpayments like 20% or who took out high-risk loans requiring high-ratio mortgage insurance may be in the worst position.These people may be in a negative-equity situation that makes it almost impossible to sell since they owe more on mortgage debt than the property is worth.
The recent rate hikes will likely increase homeowners' monthly payments by 18 percent, according to Ratesdotca.
If your mortgage is up for renewal, you may want to shop it around. There are still some lenders offering mortgages in the high 4’s although that’s unlikely to last much longer.
Are we likely to see a 3 stage pivot by the Central Bank in Canada? Well, according to experts that seems to be very likely.
It is predicted with only a 50 basis point hike on Wednesday by the Bank of Canada, which was 25 points less than what the market expected, the Bank of Canada may be winding down its front-loading of rate hikes. According to experts like Deputy Chief Economist of CIBC, Benjamin Tal and even prominent traders like Greg Mannarino of traderschoice.net, the fed wil be easing rate hikes in the coming months, only to leave them alone for the next year, which will, of course, allow markets to shoot back up.
According to Rob McLister, of MortgageLogicNews, the Bank of Canada may or may not have made a mistake easing their rate hikes to only 50 basis points when market was expecting 75 points. Most people don’t believe inflation is coming down, although the Bank is telling us it is coming down, except core inflation, which is still rising despite unprecedented rate hikes.
According to a recent survey, 53% of Canadians don't even know the Bank of Canada has an inflation target, much less a 2% target. Quantitative Tightening is also not well accepted by everyone, and when you factor in the tight labour market, this could create a nightmare for central banks. Due to the fact that people will ask for wage increases to keep up with inflation, inflation will not be lowered.
Market expectations have historically been higher than what the Bank has increased rates. Based on forward pricing in the bond market, overnight rates are only going to 4.25%, and core inflation is 5.3%, which may be enough for the central banks to stop raising rates for now. Nevertheless, anything can happen, as McLister pointed out. More wars, Chinese trade disputes, oil, the loonie, etc. and it may be too early for the Bank of Canada to get softer on inflation.
Even though we are headed towards a recession, inflation can still become entrenched.
There is a possibility that inflation has not peaked. Inflation may have peaked in June, but core inflation is more important. For mortgage interest rates to decrease, we need core inflation back to 3%. Prime could surge like it did in 1981 and if that happened again prime could go to 6.75%. We should all prepare for the worst on rates.
I agree with Rob that if rates do not increase further in 2023, consumer psychology will change and prices may bounce in the spring. If sales surge, then we are near a short-term bottom. It's anyone's guess what will happen with unemployment expected to spike, however, the housing fundamentals are still there. Lots of immigration, mortgage stress-test which is now making borrowers qualify at 7.25% for a variabel rate mortgage and so on.
Economic and financial well-being is the objective of Canada's monetary policy. Canadians are best protected by a low and stable environment. A five-year extension of the flexible inflation targeting strategy was announced by the Canadian Government and the Bank of Canada on December 31, 2021. The current inflation target is 2%, being the midpoint between 1 and 3 percent.
It is within the control range of 1-3 percent that the central bank can actively seek to maintain maximum sustainable employment levels. Inflation expectations will be anchored at 2% using this flexibility.
Monetary policy changes take time to materialize and work their way through the economy, which is why monetary policy is considered “forward-looking.”
Throughout the world, inflation has continued to rise this year, reaching highs not seen for decades. In response, many central banks have raised their policy rates. In many countries, underlying inflation has yet to ease despite a decline in commodity prices and easing inflationary pressures due to supply challenges. Businesses and consumers worldwide are feeling the effects of tightening monetary and financial conditions and Russia's invasion of Ukraine. Global economic growth is expected to slow sharply. There has been a significant decline in household spending and investment in the United States. Canadian exports are driven by these factors. Energy shortages and elevated uncertainty are expected to cause economic contraction in the euro area during the second half of 2022.
As China's economy recovers from the most recent round of lockdowns due to the COVID-19 pandemic, the property market correction continues to stifle growth. Global financial conditions have been affected by the rapid rise in US policy interest rates and the surge in the US dollar. There are rising debt servicing costs for many emerging-market economies (EMEs), with some developing economies having difficulty servicing their debt. Many countries experience inflationary pressures due to the appreciation of the US dollar. In 2023, the Bank of Canada projects global growth to decline from roughly 314% in 2022 to 112%. If the COVID-19 pandemic and the 2008–09 global financial crisis are excluded, this would be the slowest rate of global growth since 1982. Despite tighter monetary policy and tighter financial conditions, growth is expected to pick up to around 212% in 2024. At the global level, inflation is expected to decline to levels that are close to the targets set by central banks in 2024. As monetary policy tightens, commodity prices will fall, supply challenges will ease, and demand will slow, which will lead to lower inflation.
Here are the Bank of Canada’s changes to the projections that made in July:
There are potential output growth changes. The negative effects of supply chain disruptions on productivity and of labour market mismatch that previously assumed to be temporary are now assumed to be permanent.
Financial conditions are tighter, and wealth is lower than expected. Household spending has consequently been revised down.
As a result of lower commodity prices and weaker foreign demand projections, exports have been revised downward. These effects are partially offset by the depreciation of the Canadian dollar.
It is expected that business investment will decline this year due to tighter-than-expected financial conditions, weaker foreign demand, and the recent depreciation of the Canadian dollar, which has raised the price of imported machinery and equipment in Canadian dollars.
Inflation in the consumer price index (CPI) is expected to be lower than previously predicted in 2022 and 2023. According to revised forecasts, CPI inflation will be just under 7% in 2022 and about 4% in 2023. Inflation is expected to remain relatively unchanged in 2024. Several factors contributed to the downward revisions, including lower gasoline prices and weaker demand. Inflation in 2023 is also expected to be reduced by lower-than-expected shipping costs and easing global cost pressures. These cost pressures are partially offset by the weaker Canadian dollar.
Global economic challenges and risks are becoming more complex. There is still widespread and high inflation in most countries. Some central banks have begun shrinking their balance sheets as well as raising interest rates rapidly. A tightening in financial conditions has increased financial stress in 2022.
Rising geopolitical tensions and Russia's invasion of Ukraine remain major uncertainties. The projection incorporates some of the risks identified in previous issues of the Report. Base-case scenarios include weaker global growth, lower commodity prices, tighter global financial conditions, and sharper declines in Canadian housing activity in the near term.
There are two main risks to the inflation outlook, according to the Bank. It is possible that inflation could stay higher for a longer period of time than predicted in the base case. Inflation expectations failing to adjust downward as expected is one way this could occur. This would result in a wage-price spiral according to the July Report. Stickier inflation can also be caused by other factors. A global economic slowdown could be even more severe and inflation could fall further than expected. Since inflation is persistently high, the Bank is more concerned about the upside risk than the downside risk.
Upside risk: High inflation that persists Inflation could persist at a higher rate than expected. Global or domestic channels could pose this risk. There are some global factors responsible for recent high inflation that could last longer or have a greater impact on consumer prices than expected. Price spikes in oil, natural gas and agricultural products could result from an intensification of supply disruptions caused by Russia's invasion of Ukraine. Increased geopolitical tensions may prolong supply chain disruptions, creating higher prices for internationally traded goods. It is also possible that domestic factors will keep inflation high. The pandemic has increased short-term inflation expectations. The inflation rate will remain higher for longer if these expectations persist longer than expected. Additionally, households may tap into their higher levels of savings more than anticipated. Inflation would be pushed higher by increased household spending.
Global financial vulnerabilities could amplify the impact of tighter monetary policy in many countries, leading to a severe global slowdown. There is a high level of debt in many countries, including sovereign debt, nonfinancial corporate debt, and household debt. There is also a vulnerability associated with significant external borrowing in US dollars for several EMEs. Lower levels of liquidity have made some funding markets more fragile. It is possible for higher-risk borrowers to face funding strains and a prolonged period of deleveraging as a result of an abrupt repricing of risk. Consequently, commodity prices are likely to fall and a global slowdown will be more severe. Foreign demand could be weaker, terms of trade could fall, and spillovers could affect the Canadian economy. The resulting tighter financial conditions and higher unemployment could undermine homebuyer sentiment and lead to a larger-than-expected drop in house prices. This in turn could reduce household wealth, access to credit and consumer confidence. The base case assumes that the spike in goods prices since the beginning of the pandemic will persist. In the event of a slowdown, however, these prices could decline in global growth proves to be more severe than anticipated.
A sharper slowdown, especially in the US, may result in retailers offering deep discounts if they have too much inventory.
Ontario is still tackling its housing crisis.
Since October 25, 2022, the Non-Speculation Tax rate has increased from 20% to 25%. As home ownership becomes more and more out of reach, foreign real estate is eating into Canadians' buying power. It is intended to discourage foreign speculation in Ontario by making it harder to buy property.
As a result of these steps, both near-term solutions and long-term commitments will be made to provide more affordable housing options to Ontario families based on recommendations from the Housing Affordability Task Force and the first-ever Provincial-Municipal Housing Summit.
By limiting relief eligibility to newcomers who commit to stay in the province long-term, the provincial government is also eliminating loopholes.
In August, there were a little more than 5,600 home sales, down 34.2 percent year-over-year, according to the Toronto Regional Real Estate Board (TRREB). Whether higher interest rates or falling prices, prospective homebuyers are weighing current conditions.
There has been a noticeable slowdown in price growth. A year ago, the average sales price of all homes combined was $1,079,500, up just 0.9 percent.
TRREB also pointed out an important point: "The average selling price also rose slightly month-over-month, while the HPI Composite dipped compared to July.". A higher share of more expensive home types sold in August was indicated by a monthly increase in the average price versus a dip in the HPI Composite."
There has been a mixed supply. In August, there were 10,537 new residential listings, down 0.7% from July. However, active listings increased by more than 62 percent to 13,305. Toronto's real estate market has also seen robust new home construction activity, according to CMHC data. To 4,535 units, housing starts grew 12.55 percent in August. The number of units under construction as of August has increased nearly 4.5 percent from October of last year.
What are the signs this country has a housing problem, especially in Ontario and Vancouver? There has never been a time when housing has been so unaffordable as today.
Buying a home in this country has never been more difficult, according to economist Robert Hogue in a recent report from RBC.
After a hot two-year run, home prices across the country have softened in recent months, but Hogue highlights how rising interest rates have pushed home ownership costs to record levels. Since March, the Bank of Canada has steadily increased its interest rates, which added hundreds of dollars to mortgage payments. Besides this, Hogue asserts the property value increase during the pandemic has made it harder than ever to become a homeowner in Canada.
Hogue notes that RBC's national aggregate affordability measure - which represents loss of affordability - reached 60% in the second quarter, surpassing the previous worst-ever point (57%) in 1990. In Vancouver, the figure reached 90.2% and in Toronto; it reached 83%.
Hogue acknowledges that buyers in Ontario and British Columbia (BC) remain extremely challenged, but that conditions are still “manageable” in the Prairies and most of Atlantic Canada and Quebec.
Even in the priciest provinces, there is some good news for buyers. We've seen home price declines since early spring that will eventually provide relief to buyers, according to Hogue. "Some of the spectacular price gains made during the pandemic are being rolled back by the sharp housing market correction that began this spring. RBC expects benchmark prices to fall 14% nationwide by next spring — more so in Ontario and BC. As a result, ownership costs should be lower next year. Nevertheless, rate hikes might prevent potential homebuyers from entering the market, since they continue to rise in an effort to "fight inflation."
Almost half of Canadians are also putting off buying a home. Brokers and real estate agents have predicted that prices will drop another 2.2% over the fall, according to Re/Max's Fall Housing Market Outlook Report.
Furthermore, since the Bank of Canada raised interest rates in March, the cost of borrowing has steadily increased, making homeownership unaffordable for many. Even during the boom, home ownership was touted as a better option than renting because larger mortgages still meant lower monthly payments. In many cases, mortgage payments are more expensive than rent due to rising interest rates, and property prices are steadily declining, making homeownership increasingly unattractive. Overnight lending rates have increased 300 basis points since March, and today the Prime Rate is 5.45%, meaning most mortgages are also being "Stress Tested" at approximately 7% or so. In August, the Canadian Real Estate Association reported that total home prices fell 3.9%, which meant an average adjustment of $180,000.
Homebuyers presently waiting on the sidelines, even those who want to sell and buy, are likely to do so in 2023 if market conditions improve, according to Re/Max.
There is no universal application of this to Canada as a whole. When the market begins to correct itself, Ontario and Vancouver, for example, will see the most losses since these provinces saw the most gains during the pandemic. Toronto, for example, has seen a 6.3% price decline and sales are down 35%. Oakville, Ontario, on the other hand, is predicted to increase by 2% over fall. In Muskoka, prices are also expected to rise by 5%.
According to RE/MAX brokers in regions such as Vancouver, BC, Victoria, BC, Kelowna, BC, and Edmonton, AB, rising interest rates impacted local market activity. Consumer confidence weakened, there were fewer multiple offers from buyers, and conditions between buyers and sellers shifted toward more balance, according to the report, which forecasts price declines between 0 and 6.5%, and -3% in Metro Vancouver as unit sales declined by 15%.
In Calgary and Edmonton, demand continues to be strong, although prices are expected to rise by 3% and 1.5%, respectively. Cowtown sales are expected to increase by 25% this fall, according to RE/MAX.
Rising interest rates in Canada's maritime provinces, combined with the possibility of an impending recession, have dissuaded would-be home buyers.
In Charlottetown, PEI, sales dropped by almost half on a month-over-month basis because of rising rates, according to RE/MAX.
As a result of its relative affordability, Atlantic Canada continues to be a popular destination for out-of-province buyers, including Halifax, NS (+1.5%), Moncton, NB (+6%) and St. John's, NL (+7%). Charlottetown, PEI, is the outlier, where the average residential sale prices are expected to drop by 2% in the fall.
Nearly all of Canada's Big-6 banks have increased their short-term fixed mortgage rates over the past week.
Rate increases have largely been limited to 1-, 2-, and 3-year fixed mortgage products, including special offers and posted rates. The increases ranged from 10 to 55 basis points at TD, Scotiabank, RBC, BMO and National Bank of Canada.
However, big banks haven't been the only ones raising rates.
MortgageLogic.news reports that uninsured 1- and 2-year fixed rates have increased by 27 basis points and 22 basis points, respectively, since the beginning of the month. During the same period, average uninsured 5-year fixed rates increased by 5 basis points.
How does yield curve inversion occur? In the bond market, yield curve inversion occurs when short-term interest rates rise above longer-term rates. Typically, this indicates growing pessimism about near-term economic prospects, since more money is moving into longer-term bonds.
So, what is the reason for this?
Investor sentiment has been volatile in the near-term.
Because of the declining GDP, rising unemployment, and net job loss in August, economic data have been trending downward. Yield curve inversion is controversial; however, the time the curve has been inverted and its sheer magnitude shows a recession is looming.
The Office of the Superintendent of Financial Institutions recently changed the Insurer Capital Adequacy Test.
OSFI is Canada’s federal banking regulator and recently, it changed the Insurer Capital Adequacy Test for insured variable rate mortgages. Canadian mortgage default insurers must calculate their capital reserve requirements for residential variable rate mortgages based on an amortization of no more than 40 years.
As interest rates have been rising, especially adjustable rates on variable rate mortgages, longer amortization periods are being implemented beyond the current maximum of 30 years. The amortization period may extend beyond 40 years until the payment is reset to match the original amortization period.
Home Ownership is on the decline, according to Statistics Canada
According to Census data released last week, Canada's homeownership rate is declining. Household ownership (both outright and with a mortgage) fell from 69% in 2011 to 66.5% in 2021. As of 2021, approximately 10 million households owned their own homes. In contrast, renter households grew 21.5% between 2011 and 2021, more than twice as fast as owner households.
Canadian immigration is growing at an unprecedented pace, with its fastest growth since 1957.
As of July 1, the population of Canada stood at 38.9 million. In other words, 284, 982 people have been added since April 1. In terms of highest quality growth, it's the highest since 1949, when Newfoundland was a Confederation.
The provinces of Ontario, Manitoba, and Saskatchewan suffered the highest losses in interprovincial migration, while New Brunswick gained the most.
In order to improve transparency, the Bank of Canada will now publish its summary of deliberations from its policy meetings. The IMF, which stands for International Monetary Fund, provided high marks in its report, it noted that the Bank of Canada does not publish the minutes (which is a summary) of monetary policy deliberations, which is a practice considered the “gold standard” among inflation targeting central banks.
The IMF also agrees that the Bank of Canada should improve communication regarding ex-post evaluations of policy decisions along with improving the timeliness and accessibility of published macroeconomic projections.
In the coming months, the Canadian Mortgage and Housing Corporation predicts home prices will fall as much as 15% across the country.
The Canadian Mortgage and Housing Corporation (CMHC) released a comprehensive report in May that revealed new housing starts haven't kept up with population growth in some of Canada's largest cities, especially Toronto, making affordability a "noteworthy" problem.
According to the housing authority the following month, the planned construction of new units by 2030 will not be enough to address Canada's supply and affordability issues, concluding that an additional 3.5 million units will be required.
According to the CMHC report released in June, the housing stock will rise by 2.3 million units by 2030, reaching close to 19 million units. In order to make Canada affordable for all, that number would have to rise to over 22 million, according to the report.
For those re-qualifying for a mortgage at the current rate plus two percentage points, the Toronto Regional Real Estate Board has called for a more flexible stress test. So far, OFSI has rejected the idea of removing or making amendments to the mortgage stress test.
Rob McLister, founder of Ratespy.com says that CMHC is actually hinting at tightening mortgage policies, which will make financing even more difficult. As I mentioned earlier, CMHC is actually predicting a market correction of 15-18% nationally. According to Evan Siddall, the former CEO of CMHC, the Canadian economy could be very hard hit, especially with so much debt.
In order to understand the potential risks ahead, the right policy measures must be taken and young people must be warned that they could face negative equity, which is when you owe more on your mortgage than your property is worth. Buying a home with a mortgage is especially risky less than 20 percent down, since it doesn’t take much correction in the market to tip this class of buyers into the “negative equity” territory.
As predicted by not only CMHC, but also big banks like RBC and BMO, buyers with 5-10% down could very well lose that downpayment through the depreciation of real estate by 15-30% in the next coming months. Why is negative equity important?
If the recession becomes worse, it won't be possible to sell your house if you lose your job, since if you purchased with a high-ratio insured mortgages you might owe more than your house is worth, which would mean you would have to come up with the difference to sell. When we sell our real estate, we usually have left over profits, so this is definitely not something we're used to.
It is difficult for people to move or refinance if they are underwater. CMHC will likely create policies to protect against this in the future. First-time buyers may need a larger down payment or a more rigorous stress test. In the coming weeks and months, I will be watching for and reporting on any policy changes proposed or implemented.
Banks are also looking at their risks and whether they need to change their policies to protect against default or homeowners entering negative equity territory.
Banks, governments, and central banks are all taking action that is causing a tremendous "rethink" about homeownership. Does real estate still outperform renting in a declining asset environment? One thing is certain: the central bank can control property values through its monetary policies. In the wake of a 10%-20% decline in real estate since March, people are now taking more time to decide whether they should buy now or wait 3-6 months.
There will be a 2-year lag effect on the housing market in a recession. There is a possibility that many people may not be able to get jobs back, including those who would like to buy a house or already own one. Unknowns abound. The housing market has just begun to feel more pain, according to Rob McLister.
The Bank of England has now pivoted back to money-printing or Quantitative Easing.
To protect the macroeconomic situation in the UK, the Financial Institution of England is pivoting to quantitative easing. In order to restore economic stability within the UK, the Financial Institution of England will buy long-term government bonds.
The Sterling Pound fell to its lowest stage against the US greenback after the new UK Prime Minister revealed plans to reduce taxes. Tax cuts financed by debt were announced by the UK's new chancellor.
Essentially, the UK is in the midst of a full blown financial disaster as inflation continues to soar. Moreover, the fear of a recession (which we are likely already in) has adversely affected the UK's macroeconomic situation. Accordingly, the Bank of England will pivot to Quantitative Easing in order to restore some stability to the economy.
Is the US Federal Reserve also poised to pivot? Everyone is asking this question.
As of now, the Federal Reserve maintains a hawkish stance on inflation. According to Neel Kashkari of the Minnesota Fed, interest rates may not be excessive enough. Furthermore, Susan Collins of the Boston Fed emphasizes the importance of maintaining hawkish policies.
The CEO of Eight World, Michael van de Poppe, reveals that the Fed may have to pivot eventually. As the demand slowdown accelerates, recession fears are growing.
Central banks face an acute dilemma they haven’t faced for a long time as the global economy teeters and markets are in turmoil. The recent crash of the British pound and bond markets is the latest example. The choice is between maintaining price stability – tightening monetary policy to avoid inflation spiraling out of control – and financial stability – preventing financial markets from seizing up.
According to the Federal Reserve, it plans to keep hiking interest rates until inflation returns closer to the bank’s target of 2 to 3 percent.
The result might be the kind of serious, panic-level troubles reminiscent of the global financial crisis and the COVID-19 pandemic.
There is no doubt that American markets are under stress at the moment. Over the past year, Bitcoin (BTC) and ether (ETH) are down more than 50%, the Nasdaq 100 has fallen 30%, and the S&P 500 is down 22%.
As a place to hide during asset crashes, the bond market – as represented by the "risk-free" 20-year bond – underperformed the S&P, losing 30% in 2022.
Since the Fed was founded in the early 20th century with the aim of reducing the threat of bank runs, the Fed has always made it a priority to help financial markets. Although implicit throughout the bank's history, the Fed's price stability mandate wasn't explicitly enshrined in law until 1977.
Is the Fed likely to prioritize inflation over market stability this time around?
According to Dick Bove, chief financial strategist at Odeon Capital, whenever the United States economy or financial system faces difficulties, the Fed can print money to fix the problem. However, we've learned that we can't continue doing what we've done.""Wall Street isn't going to give up the American economy just to please Wall Street," he said.To stop the shocking rise in rates over the past few weeks, the Bank of England announced on Wednesday its intention to buy as many long-dated gilts as necessary to restore stability to its bond and currency markets.Although U.S. bond yields have not fallen as dramatically as those in the U.K., the 10-year Treasury yield briefly reached 4% on Wednesday, a record high.U.S. markets could get a lot worse if Fed Chair Jerome Powell and his colleagues fail to bring current inflation rates of 8.3% back to near their 2% target.
Does the Fed need to pivot like the Bank of England and buy bonds outright again?
According to Bove, the U.S. is at a point where the old playbook - the Fed aggressively easing policy to cover up a crisis - won't work anymore. According to him, inflation will take off "like a rocket" if the Fed prints money.In order to achieve long-term stability, the Fed seems willing to put markets through some short-term pain, according to Beth Ann Bovino, chief U.S. economist at S&P Global.During these times, it's hard to know what the Fed is thinking, but my impression is they don't want a global financial crisis.Due to shaky markets and the recent dot plot showing continued rate hikes into 2023, Fed officials keep reiterating they won't pivot to easier policy. According to the fed funds futures market, no rate hikes or rate cuts are priced in for all of 2023.As Bovino put it, "it could be that they're talking the talk." The Fed is trying to establish credibility by giving markets forward guidance about what it plans to do.
It's just not possible for them to keep increasing debt, according to Bove. The United States cannot pay back its debt at some point when the debt becomes so enormous that it cannot be repaid.
Alberta is calling…
Residents of Ontario are fleeing by the tens of thousands because of the astronomical cost of living. Data from Statistics Canada (Stat Can) shows a surge in interprovincial migration in Q2 2022. The talent in Ontario is fleeing to more affordable regions such as Alberta and Nova Scotia. Immigration is having a hard time filling the gap, according to a Big Six bank. As a result of Ontario's failure to compete for young adults, this level of migration has never been seen in the province before.
There is a sudden rush to move among Ontario residents. In Q2 2022, over 49,000 people left the province for another province. Outflows were up 77.6% from the previous quarter and 45.9% from last year's same quarter. In a single quarter, Ontario has never seen so many people rush for the door.
The trend has reached an emergency level. A total of 125,000 residents left in Ontario, up 54.7% from a year ago. A lack of perceived opportunity is reflected in strong performance and rising outflows. Housing is expensive in one of North America's worst-paying tech hubs, so it made sense.
The negative numbers indicate that more people are leaving than arriving in a province. For a temporary fix, immigration can be used, but this is a long-term problem. As with locals, immigrants eventually see a lack of opportunity and move as well.
It has never been this problematic for Ontario's net interprovincial flows. There were 21,000 net outflows in Q2 2022, a record since the early 1980s recession. There were over 47,200 outflows for the quarter. In the 12-month period, 47,200 more people left than arrived in other provinces. The situation in Ontario has never been this bad, and it's getting uglier.
According to BMO Capital Markets, the seasonally adjusted annualized net migration looks terrible.
By: Sarah Colucci
Senior Mortgage Agent, Lic. M14000929