Recently, the Bank of Canada announced another increase of 50 basis points, raising the benchmark interest rate to 3.75%. This marks the sixth increase in the benchmark rate since March of this year, aimed at curbing inflation and achieving the previously set inflation target of 2%.
Currently, the deposit rate in Canada is 3.75%. The Bank of Canada will continue to implement a monetary tightening policy and has indicated that further interest rate hikes are expected to curb inflation. The Bank of Canada predicts that the inflation rate will decline to around 3% by the end of next year and reach the 2% target by 2024. The next interest rate announcement from the Bank of Canada is scheduled for December 7.
In Canada, the economy continues to operate under conditions of excess demand, and the labor market remains tight. Demand for goods and services continues to exceed the economy's supply capacity, putting upward pressure on domestic inflation. Businesses continue to report widespread labor shortages, and as the economy fully reopens, strong demand has led to sharp increases in service prices.
The impact of the recent interest rate hikes by the Bank of Canada is becoming increasingly evident in interest-sensitive sectors of the economy: real estate activity has sharply contracted, and spending by households and businesses is slowing. Furthermore, as the effects of high interest rates spread throughout the economy, economic growth is expected to stagnate by the end of this year and into the first half of next year. At the same time, the interest rate hikes have led to a drop in housing prices; the latest comprehensive house price index report from Teranet-National Bank indicates that Canadian house prices fell by 3.1% in September compared to August, marking the largest month-over-month decline since 1999.
In addition, to address issues such as housing affordability and to further curb speculative activities by non-resident investors in the provincial real estate market, Ontario, Canada's most populous province, has announced a significant increase in the foreign buyer tax to the highest level in Canada. At the same time, the Ontario government has announced comprehensive housing reform measures that will, in certain cases, override municipal zoning bylaws, allowing for the construction of up to three units on each residential lot.
The details of the new legislation were first publicly disclosed at an event hosted by the Toronto Regional Board of Trade, where Premier Ford stated that the third part of the government's housing action plan includes "new solutions" to enable the next generation in Ontario to own their homes. The government has introduced several legislative reforms and proposals to help "build housing faster and reduce costs," aiming to achieve the goal of constructing 1.5 million homes within ten years. As part of this plan, Ontario will allow more housing construction without the need for further planning approvals.
According to the legislation, there can be up to three units on a residential lot without the need for bylaw amendments or municipal permits. An example provided by the Ontario government shows that a basement unit and a garden suite or laneway house can be built on the property and rented out to tenants. Duplexes and triplexes can be built on a single residential lot without regard to municipal zoning bylaws. Under this legislation, municipal authorities cannot impose size limits on the units or require multiple parking spaces for each unit. According to the new legislation, these units are exempt from development fees and parkland dedication fees. Government officials hope this will create a broader rental housing mix. The government states that if the housing bill is passed, it will take effect in the summer of 2023.
With various signs indicating a potential good time for investors looking to invest in Canada, non-Canadian residents may find it increasingly difficult to purchase property. Therefore, interested parties should obtain legal Canadian status as soon as possible.
If you wish to immigrate to Canada, Saskatchewan is a good choice! The Saskatchewan Entrepreneur Immigration program is one of the few investment immigration programs in Canada that does not have strict English language requirements, and the application requirements are not high. Since the policy opened, it has been highly sought after by applicants. Opportunities are always reserved for those who are prepared. Friends interested in applying for the Saskatchewan Entrepreneur Immigration program should seize the time to enter the pool quickly; the earlier you apply, the more peace of mind you will have, striving to receive an invitation in the next round of selection. There will be one more selection for the Saskatchewan Entrepreneur Immigration program in 2022, scheduled for November 3, 2022. Please make sure to seize this rare opportunity to immigrate to Canada without needing English proficiency.
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