Why the Governor of the Bank of Canada worries about your debt
Bank of Canada Governor Stephen Poloz says a lot of things need to come together before the bank is confident it's time for another interest rates increase, including a better understanding of the impact of recent hikes on the country's historic level of debt.
In an exclusive broadcast interview with The House, Poloz said the bank is taking a cautious approach to interest rates and that it's treading lightly when it comes to the debt Canadians are taking on.
"It's the one thing I would say we're the most cautious about," Poloz told Chris Hall.
While the economy is doing well, the "debtors club" is growing, Poloz said, mostly from first time home buyers taking on hefty mortgages because of the housing markets.
Increasing interest rates could have a big impact on people's ability to spend if they already have a lot of debt.
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"Because of all that debt, we aren't as sure as we normally would be, what would be the response of the economy to a higher rate of interest," he said.
The bank hiked its rate twice this year — once in July and again last month — after staying on the sidelines for the previous two years. Earlier this week, it chose to leave its benchmark interest rate steady at one per cent, prompting questions as to when the next increase might come.
Poloz said that will happen, but not yet.
"As the economy continues to evolve as it has been, it will be the case that it will need less monetary stimulus in the future," he told The House.
"There are a lot of things that have to come together before we feel confident that we're all the way there."
Minister says 300,000 new immigrants a year is Canada's 'new normal'
Canada's immigration minister says Canada will welcome at least as many immigrants next year as it is in 2017.
The government's plan for annual immigration levels, which was set at 300,000 for this year, is expected to be tabled in the House of Commons next week.
Immigration minister Ahmed Hussen told The House that the government will not go below that level next year.
"Three hundred thousand is now our new normal," he said, while not closing the door to a higher number for 2018.
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"As a government we went from 260,000 to 300,000 because of the need to meet the demands of Canadian families who wanted to reunite with their loved ones," Hussen continued. "But also employers who are asking us to allow them to continue to use immigration more and more as a way to meet their growth needs."
Hussen added that he's been in the process of consultations since April to put together the immigration outlook that's coming soon, and that those consultations focused on the numbers Canada should bring in and what the right mix immigration, in terms of the different classes, should be.
He said the "vast majority" of immigrants coming in will be from the economic class because that's where the greatest need is.
This will be followed closely by family class immigrants and then refugees, Hussen said.
Statistics Canada census numbers released Wednesday revealed the number of immigrants in Canada has reached its highest rate in a century.
Ottawa 'willing to look at any good idea' to improve pensions
As support grows for legislative changes to help retirees keep their full pensions if the company they work for declares bankruptcy, the federal government is indicating it will be open-minded in looking at ways to fix the problem.
In an interview on The House, David Lametti, parliamentary secretary to the minister of innovation, said the government is willing to look at any good idea to help retirees who could be left without their pensions after Sears goes bankrupt.
"It's a lousy situation. We've got to try to make the best of it," Lametti said, adding that he won't make any promises simply because the situation is also complex.
Wanda Morris, vice-president of CARP, told The House that these retirees are not in a position to start saving or start a new career.
CARP is demanding that unfunded pension liability be given 'super priority' status so that pensioners are first in line to receive assets after a company calls it quits. It's a demand that's being echoed by two private member's bills, one from the Bloc Quebecois and the other to be tabled by the NDP.
Morris said that they want to make sure pensioners get paid for the work they've put in.
"The first folks to get paid are the trustees and the bankruptcy lawyers, and right after that, it's the bankers and the bondholders," she added. "And what we're saying is there should be a super priority for pensioners so that after having worked for years or decades they're not suddenly left out in the cold."
What should a national housing strategy include?
The federal government is set to released its $40 billion national housing strategy in the coming weeks and hopeful eyes are watching to see if it delivers enough to tackle homelessness and create affordable places to live across the country.
This includes mayors of big cities, such as Halifax Mayor Mike Savage, who have seen first-hand the need for federal housing dollars in urban centres.
It also includes those in the non-profit world who are working make sure people can afford to keep a roof over their heads, like Stéphan Corriveau from the Canadian Housing and Renewal Association.
Both spoke to The House and agreed that addressing housing issues for vulnerable populations, including Indigenous people and youth who end up on the streets, has to be part of a national housing strategy.
Savage told The House that mayors want to see funds allocated to refurbishing and updating existing social and affordable housing, a re-think of the Canadians Mortgage and Housing Association's mandate and that mayors and stakeholders on-the-ground are empowered within the strategy.
"There are a lot of answers in the community that municipal leaders would have," he said. "I think that needs to be part of the solution, to look at what's working but also what isn't."
Corriveau said that the structure of housing in Canada needs to change.
"For the last 25 years, the federal government has been heavily involving itself in supporting home ownership," he said. "That's nothing bad, but the problem is not everybody is in the situation to own a home."
He added that while federal investments have gone into helping Canadians achieve home ownership, there have been no investments in building new affordable rentals.
"This is where the problem of homelessness came from," Corriveau said.