Is the Bank of Canada courting disaster for many Canadians?

In today’s Big Story Podcast, experts predict the Bank of Canada will begin to lower interest rates later this year — just not Wednesday when it held the rate flat. But as inflation has slowed in many areas, it’s created an interesting problem for the bank and a troubling one for many Canadians.

“We have to understand what the motivations of the bank are. The bank is not targeting employment. They are not targeting GDP growth. They don’t, in the end, care what happens there. They have a singular goal, as directed by the government of Canada,” said David Macdonald, senior economist for the Canadian Centre for Policy Alternatives (CCPA).

“The government of Canada said, ‘Look, here’s your goal. Two per cent inflation come hell or high water. If it takes a recession, make it happen.’”

One of the main factors driving inflation right now is the cost of shelter — otherwise known as rising rents and mortgage costs. Those increases are driven by the high interest rates the bank is waiting to lower. The Bank of Canada wants to follow through on its “soft landing” by taking a cautious approach to lowering rates. 

But by waiting too long, are they courting disaster for millions of Canadians trying to make their monthly home payments?

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