10 Jul

Bank of Canada Maintains Overnight Rate and Raises 2019 Forecast

Latest News

Posted by: Kim Lindsay

The Bank of Canada held the target overnight rate at 1.75% for the sixth consecutive decision and showed little willingness to ease monetary policy, as stronger domestic growth offsets the risk of mounting global trade tensions. There has been ongoing speculation that the Bank of Canada would be pushed into cutting interest rates by the Fed. I do not believe the Bank will let the US dictate monetary policy when the Canadian economy is clearly on the mend. To be sure, trade tensions have slowed the global economic outlook, especially in curbing manufacturing activity, business investment, and lowering commodity prices. But the Bank as already incorporated these effects in previous Monetary Policy Reports (MPR) and today’s forecast has made further adjustments in light of weaker sentiment and activity in other major economies.

The Governing Council stated in today’s press release that central banks in the US and Europe have signalled their readiness to cut interest rates and further policy stimulus has been implemented in China. Thus, global financial conditions have eased substantially. The Bank now expects global GDP to grow by 3% in 2019 and to strengthen to 3.25% in 2020 and 2021, with the US slowing to a pace near its potential of around 2%. Escalation of trade tensions remains the most significant downside risk to the global and Canadian outlooks.

The Bank of Canada released the July MPR today, showing that following temporary weakness in late 2018 and early 2019, Canada’s economy is returning to growth around potential, as they have expected. Growth in the second quarter is stronger than earlier predicted, mostly due to some temporary factors, including the reversal of weather-related slowdowns in the first quarter and a surge in oil production. Consumption has strengthened, supported by a healthy labour market. At the national level, the housing market is stabilizing, although there remain significant adjustments underway in BC. A meaningful decline in longer-term mortgage rates is supporting housing activity. The Bank now expects real GDP growth to average 1.3% in 2019 and about 2% in 2020 and 2021.

Inflation remains at roughly the 2% target, with some upward pressure from higher food and auto prices. Core measures of inflation are also close to 2%. CPI inflation will likely dip this year because of the dynamics of gasoline prices and some other temporary factors. As slack in the economy is absorbed, and these temporary effects wane, inflation is expected to return sustainably to 2% by mid-2020.

Bottom Line: The Canadian economy is returning to potential growth. “As the Governing Council continues to monitor incoming data, it will pay particular attention to developments in the energy sector and the impact of trade conflicts on the prospects for Canadian growth and inflation.” With this statement, Governor Poloz puts Canadian rates firmly on hold as Fed Chair Jerome Powell signals openness to a rate cut as uncertainty dims the US outlook.

The Canadian central bank is in no hurry to move interest rates in either direction and has signalled it will remain on hold indefinitely, barring an unexpected exogenous shock.


By Dr. Sherry Cooper

Chief Economist, Dominion Lending Centres

Sherry is an award-winning authority on finance and economics with over 30 years of bringing economic insights and clarity to Canadians.

3 Jul

Purchase PLUS Improvements

Mortgage Tips

Posted by: Kim Lindsay

Great neighbourhood, amazing yard, love the floor plan …

You’ve found the PERFECT HOME!  Almost.

Maybe you want to update the kitchen, replace the windows, or finish the basement.

With Purchase Plus Improvements, customizing your dream home is simple and affordable.  Buy your new home and include the renovation costs in the mortgage with as little as 5% down.


  • Immediately increase your home’s property value
  • Include the renovation costs at a great interest rate
  • Complete the upgrades right away and live in the home you really want!



  • New flooring
  • Fresh paint
  • Updated kitchen
  • New siding, eaves or facia
  • Finish the basement
  • Build a new garage
  • New roof
  • Updated bathroom
  • New windows
  • New doors
  • More efficient furnace or central air system



STEP 1:  Once you find a house that you like, we get you an approval based on the accepted purchase price. From there, you’ll need to get quotes from licensed contractors for the renovations/improvements. Some lenders will allow you to do the work yourselves; quotes will be for materials only.

STEP 2:  We will then have your mortgage approval revised to include the cost of the renovations.   Add the amount of the quotes to the purchase price and this becomes the new “value” of the home; your down payment is now based on this amount.


STEP 3:  Take possession of your new home. On your possession date, the lender advances all money (including cash for improvements) to your lawyer; seller gets their portion for sale price, the additional funds for improvements are held in trust until all work is completed.

STEP 4:  Get started on your renovations; most lenders require the renovations/improvements to be completed within 120 days after taking possession.  After all the work has been completed, we order an inspection report from an appraiser to confirm.

STEP 5:  Lender instructs your lawyer to release the funds to you.


VOILA!  The renovation costs are built into your mortgage at a low interest rate, you’ve increased the value of your property, and you have the beautiful home you’ve dreamed of.


Contact me for more details!