Bank of Canada Still Expects No Rate Increases Until 2023 – Dr. Sherry Cooper

General Angela Calla 22 Jan

The Bank of Canada, this morning, released its January Monetary Policy Report (MPR), showing they expect to keep overnight interest rates at its “effective lower bound” of 0.25% until 2023. To reinforce this commitment and keep interest rates low across the yield curve, the Bank will continue its Quantitative Easing (QE) program–buying $4 billion of Government of Canada bonds every week until the recovery is well underway. The central bank indicated it could pare purchases once the recovery regains its footing.

According to the Bank’s press release, “The Governing Council will hold the policy interest rate at the effective lower bound until economic slack is absorbed so that the 2 percent inflation target is sustainably achieved. In our projection, this does not happen until into 2023.” Officials are apparently optimistic about the economy’s prospects once the vaccine is sufficiently distributed and injected. There is no indication that they are planning additional measures to ease monetary policy.

This is particularly noteworthy for two reasons: 1) some economists had been speculating that the Bank would lower the overnight rate by 10-to-15 basis points to help mitigate the impact of continued and broadening lockdowns; and, 2) others thought the early development of the vaccine would trigger sufficient growth to warrant a rate hike in 2022. In the Bank’s current view, neither is likely to be the case. Why mess with a minute cut in already record-low interest rates when mortgage lending is still strong? The slow rollout of the vaccine and the mounting second wave of cases assure weak economic activity in Canada at least until the second half of this year.

As well, inflation remains surprisingly muted. In a separate release today, Stats Canada revealed that price pressures in Canada unexpectedly slowed in December as the country endured a new wave of lockdowns. After climbing to the highest since the pandemic in November, the latest reading shows price pressures are still well below the Bank of Canada’s 2% target. That’s consistent with the view from policymakers that inflation will remain subdued for some time.

The pandemic’s second wave has hit Canada very hard, and the vaccine rollout has been disappointing. Today’s MPR predicts that the economy will contract in the first quarter of this year. Economic weakness could be exacerbated by the Canadian dollar’s strength, which moved to above 79 cents US following today’s BoC announcement. Ten-year yields edged up modestly as well.

Bottom Line

For the year as a whole, economic growth is expected to be around 4% in 2021, compared to a contraction of -5.5% last year. As the inoculated population grows, the Bank forecasts an acceleration in growth to just under 5% in 2022 and a more-normal 2.5% in 2023. According to the January MPR, “The medium-term outlook is stronger than in the October Report because of vaccines’ positive effects, greater fiscal stimulus, stronger foreign demand and higher commodity prices. Meanwhile, potential output has also been revised up, reflecting an improved projection for business investment and less scarring effects on businesses and workers. There is considerable uncertainty around the medium-term outlook for GDP and the path for potential output. Thus, while the output gap is expected to close in 2023, the timing is particularly uncertain.”

Concerning housing activity, the report said, “Demand for housing has continued to show resilience, despite increasing case numbers and tightening restrictions. Housing activity should remain elevated into the start of 2021, supported by low borrowing rates and resilient disposable incomes. Changes in homebuyers’ preferences have also played a role. For example, price growth has been strongest for single-family homes and in areas outside city centres”. 


Angela Calla is a 16-year award-winning woman of influence and mortgage expert. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. She educates and empowers individuals on the “The Mortgage Show”, which she’s hosted for over a decade, and is the best-selling author of The Mortgage Code available on Amazon. All proceeds from her book sales are donated to the YWCA helping empower women and children in our community. Additionally, in August of 2020, she surpassed $1 Billion dollars in funded personal mortgage volume at the young age of 37.

Angela leads by example with passion and conviction. She is known as an industry expert on TV and radio and the go-to source for publishers across the Country. She has even been known to sing the national anthem at sporting events! On top of all her achievements, Angela finds the time to be a loving wife and mother of two beautiful children.

For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or 604-802-3983.

BC Assessment Update – Home Owner Grant threshold set for 2021 tax year

General Angela Calla 11 Jan

The 2021 Home Owner Grant threshold is set at $1.625 million, ensuring the same percentage of British Columbia homeowners continue to be eligible.

New in 2021, the Province is taking over full administration of the grant program to ease the burden on municipalities. The Province already administers the grant for rural homeowners. Homeowners in all municipalities will now submit their applications directly to the Province instead of through their municipal office. Similar to previous years, applications will open in May when a majority of property tax notices are received.

As in previous years, homeowners are reminded to keep their property assessment notice from BC Assessment or property tax notice from their municipality. They will need their roll and jurisdiction number from their notice to apply for the Home Owner Grant with the Province.

The grant is reduced by $5 for every $1,000 of assessed value above the threshold. Some low-income seniors, veterans and people with disabilities can also apply for a supplement that replaces any grant amount they lose due to the value of their home being over the threshold.

The grant amounts for 2021 for homeowners in Metro Vancouver, the Fraser Valley Regional District and Capital Regional District are:

  • up to $570 for the basic Home Owner Grant; and
  • up to $845 for homeowners who are 65 years or older, or the homeowner is a person with a disability or lives with a relative who has a disability.

The grant amounts for 2021 for homeowners located in a northern or rural area (outside Metro Vancouver, the Fraser Valley Regional District and the Capital Regional District) are:

  • up to $770; and
  • up to $1,045 for homes in northern or rural areas where the homeowner is 65 years or older, or the homeowner is a person with a disability.

Homeowners may also be eligible for property tax deferment if they are 55 years or older or are financially supporting a dependent child.

Learn More:

To find out more about Home Owner Grant centralization starting this year, visit:
https://www2.gov.bc.ca/gov/content/taxes/property-taxes/annual-property-tax/home-owner-grant

To find out whether you qualify for property tax deferment, visit:
https://www2.gov.bc.ca/gov/content/taxes/property-taxes/annual-property-tax/defer-taxes

People with questions about their assessed property values, including questions about challenging assessments, can contact BC Assessment: https://www.bcassessment.ca/


Angela Calla is a 16-year award-winning woman of influence and mortgage expert. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. She educates and empowers individuals on the “The Mortgage Show”, which she’s hosted for over a decade, and is the best-selling author of The Mortgage Code available on Amazon. All proceeds from her book sales are donated to the YWCA helping empower women and children in our community. Additionally, in August of 2020, she surpassed $1 Billion dollars in funded personal mortgage volume at the young age of 37.

Angela leads by example with passion and conviction. She is known as an industry expert on TV and radio and the go-to source for publishers across the Country. She has even been known to sing the national anthem at sporting events! On top of all her achievements, Angela finds the time to be a loving wife and mother of two beautiful children.

For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or 604-802-3983.

Government Updates – January 7, 2021

General Angela Calla 8 Jan

GOVERNMENT UPDATES
January 7, 2021

PROVINCIAL GOVERNMENT UPDATE

Provincial Health Order Extended

By order and direction of the PHO, individuals and businesses in B.C. must significantly reduce social interactions and travel, all events and social gatherings are suspended to significantly reduce COVID-19 transmission related to social interactions and travel.

The order is in effect until February 5, 2021 at midnight.

More information can be found here.

The BC COVID-19 Recovery Benefit online applications are open

The BC Recovery Benefit is a one-time direct deposit payment for eligible families, single parents or individuals. Benefit eligibility is based on net income from your 2019 tax return. This benefit is a tax-free payment of up to $1,000 for eligible families and single parents and up to $500 for eligible individuals. You must apply to receive the benefit, and you have until June 30, 2021 to apply:
https://www2.gov.bc.ca/gov/content/economic-recovery/recovery-benefit

PREVIOUS UPDATES

Click here to see previous updates.


Angela Calla is a 16-year award-winning woman of influence and mortgage expert. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. She educates and empowers individuals on the “The Mortgage Show”, which she’s hosted for over a decade, and is the best-selling author of The Mortgage Code available on Amazon. All proceeds from her book sales are donated to the YWCA helping empower women and children in our community. Additionally, in August of 2020, she surpassed $1 Billion dollars in funded personal mortgage volume at the young age of 37.

Angela leads by example with passion and conviction. She is known as an industry expert on TV and radio and the go-to source for publishers across the Country. She has even been known to sing the national anthem at sporting events! On top of all her achievements, Angela finds the time to be a loving wife and mother of two beautiful children.

For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or 604-802-3983.