Fall Economic Statement Delivered Despite Chrystia Freeland’s Resignation

General Angela Calla 18 Dec

 
Chrystia Freeland Resigns On The Day of The Fall Economic Statement
Finance Minister Freeland rocked markets today by submitting her resignation from Cabinet. Trudeau had asked her to take another Cabinet post, but she declined in a scathing letter accusing Trudeau of “costly political gimmicks” like “bribe-us-with-our-own-money cheques for $250 and a two-month GST holiday.

“Inevitably, our time in government will come to an end,” Ms. Freeland said, openly acknowledging what polls have been saying for over a year. “But how we deal with the threat our country currently faces will define us for a generation, and perhaps longer.”

The Federal deficit for 2023-2024 grows from $40 billion to $61.9 billion, partly boosted by a court settlement to pay funds to Indigenous children. The deficit far surpasses Freeland’s guardrail of $40.1 billion for last year’s budget deficit. New spending initiatives were announced amounting to $24 billion over the next six years. The most significant component is accelerated incentives to encourage business investment to improve productivity. This is very similar to a program issued by Finance Minister Frank Morneau years ago.

Dominic LeBlanc has been sworn in as the new Finance Minister.
Bottom Line

Today’s Fall Economic Statement took a backseat to the news that Chrytia Freeland resigned. There is more talk of a Trudeau resignation and an early election. Liberals are suggesting that Trudeau has stayed on too long, likening him to Biden. The caucus is meeting at 5 PM today.
Dr. Sherry Cooper
Chief Economist, Dominion Lending Centres
drsherrycooper@dominionlending.ca

 

Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

 

Canadian home sales rose again in November as new listings declined and prices rose

General Angela Calla 18 Dec

The Canadian Housing Market Strengthens Further

Home sales activity recorded over Canadian MLS® Systems rose again in November, building on October’s surprise jump.

Sales were up 2.8% m/m in November compared to October and now stand a cumulative 18.4% above where they were in May, just before the first interest rate cut in early June. Actual (not seasonally adjusted) monthly activity was 26% above November 2023.

The November increase was driven by gains in Greater Vancouver, Calgary, Greater Toronto, and Montreal and double-digit sales increases in smaller cities in Alberta and Ontario.

According to Shaun Cathcart, CREA’s Senior Economist, “Not only were sales up again but with market conditions now starting to tighten up, November also saw prices move materially higher at the national level for the first time in almost a year and a half. Normally, we might expect this market rebound to take a pause before resuming in the spring; however, the Bank of Canada’s latest 50-basis point cut together with a loosening of mortgage rules could mean a more active winter market than normal.”

New Listings

New listings edged down 0.5% month-over-month in November, building on a larger 3% decline in October. With sales also rising in November, the national sales-to-new listings ratio tightened to 59.2%, up from 57.3% in October. Between April and September this year, the measure had been in the 52% to 53% range. The long-term average for the national sales-to-new listings ratio is 55%, with a sales-to-new listings ratio between 45% and 65%, generally consistent with balanced housing market conditions.

“October and November marked the start of the long-awaited rebound in resale housing activity, with the combination of lower borrowing costs and more properties to choose from coaxing buyers off the sidelines,” said James Mabey, CREA Chair.

A little more than 160,000 properties were listed for sale on all Canadian MLS® Systems at the end of November 2024, up 8.9% from a year earlier but still below the long-term average for that time of the year of around 178,000 listings.

There were 3.7 months of inventory nationally at the end of November 2024, down from 3.8 months at the end of October and the lowest level in 14 months. The long-term average is 5.1 months of inventory, with a seller’s market below about 3.6 months and a buyer’s market above 6.5 months.

 

 

 

 

Home Prices

The non-seasonally adjusted National Composite MLS® HPI stood 1.2% below November 2023, the smallest decline since last April. The non-seasonally adjusted national average home price was $694,411 in November 2024, up 7.4% from November 2023.

 

Bottom Line

The Bank of Canada’s aggressive rate-cutting and regulatory changes that make housing somewhat more affordable have provided kindling for the Canadian housing market. While the conflagration isn’t likely to peak until spring, a seasonally strong period for housing, activity has already started to pick up. The November uptick in home prices could provide more impetus for potential buyers to move off the sidelines. The new housing initiatives go into effect today and tomorrow.

Debt-to-income ratios for Canadian households have improved as growth in disposable incomes continues to outpace borrowing. This bodes well for more robust residential real estate activity as the Bank of Canada continues to cut rates, albeit at a slower pace. We expect quarter-point rate cuts until the overnight rate, now at 3.25%, falls to 2.5% or even lower if US tariffs are introduced.

Article Courtesy of Dr. Sherry Cooper, Chief Economist, DLC

 

Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

With rates going down, should I take an adjustable rate Mortgage?

General Angela Calla 16 Dec

Navigating the mortgage market requires more than choosing between a fixed or adjustable rate. Over my 20 years in this industry, I’ve seen how markets and lenders adapt in ways consumers might not expect. Adjustable rates can be a VERY powerful tool, but they come with complexities that borrowers must fully understand before committing.

Our approach at the Angela Calla Mortgage Team is not to say adjustable rates are bad or banks are at fault. Instead, we work to empower borrowers by presenting all qualified options and using our experience to help them make confident, informed decisions they’re comfortable with. For instance, adjustable and variable-rate mortgages often come with significant advantages such as large discounts, low compounding frequencies, and only three months of interest for penalties, as well as the flexibility to easily lock into fixed rates when needed.

Here are some important lessons from recent history that highlight the factors borrowers need to consider:

2015: BoC Rate Cuts That Didn’t Fully Benefit Borrowers

In January and July 2015, the Bank of Canada (BoC) reduced its overnight rate twice, by 0.25% each time (a total of 50 basis points). Despite this, Canadian banks only passed along 0.45% (45 basis points) of the cuts, keeping 0.30% for themselves.

This situation highlighted that central bank decisions don’t always translate directly into borrower savings. That missing 0.30% never made its way back to consumers.

2016: Independent Prime Rate Adjustment by a Major Bank

In 2016, one of Canada’s major banks introduced its own proprietary prime rate, setting it slightly higher than the industry-standard prime rate. While most adjustable-rate borrowers didn’t notice because their payments stayed the same, more of their payments were applied to interest instead of principal.

This independent adjustment demonstrated how lenders can make changes that impact borrowers in ways they may not immediately notice. Adjustable-rate mortgages, where payments change with Prime, and variable-rate mortgages, where the interest rate changes but payments may remain constant, further illustrate how adjustable rates are not all the same in mechanics or benefits.

2021-2022: Tiff Macklem’s Reassurance and the Rate Surge

In 2021, Bank of Canada Governor Tiff Macklem assured Canadians that rates would remain low for a prolonged period. This led many borrowers to choose variable-rate mortgages, believing they’d benefit from sustained savings.

However, by 2022, the BoC raised rates rapidly to combat inflation, pushing them to the highest levels in over a decade. Borrowers with adjustable-rate mortgages (ARMs) faced significant payment increases, while variable-rate mortgages hit trigger rates, leading to grossly extended amortization periods in some cases.

Rapid Rate Movements and Market Surcharges

When rates move quickly, lenders may also surcharge adjustable-rate offerings. For example, instead of offering Prime – 0.50%, lenders might adjust to Prime – 0.10% or even Prime + 0. This means the actual discount off prime becomes less favourable, directly impacting borrowers’ costs.

Evaluating the actual discount from prime, rather than focusing solely on the rate, is critical when considering adjustable-rate mortgages.

Financial Empathy During Uncertain Times

In industries prone to strikes or sudden income changes, lenders vary widely in their approach to financial empathy. Some lenders are quick to damage a borrower’s credit score or refuse to renew existing mortgages during difficult times. Others show understanding by offering deferred payment options to help borrowers weather financial challenges.

With our ever-changing market, assessing a lender’s flexibility and empathy is a vital part of the evaluation process. These factors, along with rate comparisons, go into the discussions we have with clients to ensure they’re set up for success in any scenario.

What You’ll Learn in The Mortgage Code

I explore these topics and more in my book, The Mortgage Code. This guide gives borrowers the tools they need to navigate the mortgage market with confidence, helping them understand how factors like market shifts, lender policies, and economic uncertainty can affect their financial future.

Order The Mortgage Code on Amazon. https://www.amazon.ca/Mortgage-Code-Helping-Property-Mistakes-ebook/dp/B07HFHR8TV

Key Takeaways for Borrowers

Understand the risks and rewards: Adjustable rates can offer flexibility and savings, but they come with unpredictability.

Evaluate lender policies: Consider how your lender handles deferred payments, renewals, and financial hardships.

Stay informed about rate discounts: The actual discount off prime, lock-in policies, and penalties matter in addition to just the rate itself.

Work with a trusted advisor: Our experience ensures every aspect of your financial situation is considered, not just the numbers.

 

Mortgage decisions are more than just choosing between fixed and adjustable rates—they’re about finding the right fit for your life and goals. Let’s work together to ensure you have clarity and confidence in every decision.

Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

Bank of Canada and More Important Updates

General Angela Calla 12 Dec

I wanted to share some key updates that could impact your mortgage and financial planning as we approach the end of the year.

1. Bank of Canada Rate Decrease

The Bank of Canada has announced a 50-basis-point rate decrease, bringing the prime rate down from 5.95% to 5.45% with most lenders.  For adjustable or variable rate mortgages, this means approximately $30 savings per month per $100,000 owing on your mortgage.

· This change directly affects Adjustable-Rate and Variable-Rate Mortgages, potentially lowering your payments.

· If you’re considering a renewal or refinance, now is a great time to explore how you can benefit.

· For clients with mortgages currently in progress with us, our team automatically reviews your file to ensure you secure the lowest rate available.

The next Bank of Canada rate announcement will be in January 2025. Here’s the official press release for more details.

Click on the image below to watch Angela on Global News Morning.

 

2. Increased Insured Mortgage Cap (Effective December 15th)

As of December 15th, the insured mortgage cap will increase, offering greater flexibility for borrowers.

This change could open new opportunities for home purchases, renewals, and home renovation financing. Feel free to reach out to discuss how this update might work in your favor. You can also check out our previous post on this here and if you’re needing help with additional ways to help save for a down payment, you can find 3 helps tools here.

3. End-of-Year Document Organization

As we approach year-end, it’s the perfect time to get organized for tax filing and financial planning.

Start gathering key documents like:

· Pay stubs, T4s, and annual mortgage statements

· Any other financial records relevant to your taxes or mortgage

I recommend creating a dedicated folder for these items to streamline:

· Tax filing – Ensuring accurate and stress-free returns

· Mortgage renewals or reviews – Making future adjustments smooth and hassle-free

By being proactive now, you’ll save time and avoid stress later.

If you have any questions about these updates or need help with year-end preparations, please reply to this email with your questions or introductions to loved ones. We are here to help!

 

Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

The Bank of Canada Cuts Its Policy Rate By Another 50 Basis Points

General Angela Calla 12 Dec

The Surge In Canadian Unemployment Keeps Another Jumbo Rate Cut In Play In December

The BoC slashed the overnight rate by 50 bps this morning, bringing the policy rate down to 3.25%. The market had priced in nearly 90% odds of a 50 bp move, where consensus coalesced. The combined slower-than-expected GDP growth and a sharp rise in the Canadian unemployment rate to 6.8% triggered the Bank’s second consecutive jumbo rate cut. Today’s move will take the prime rate down 50 bps to 5.45% effective tomorrow, reducing floating rate mortgage loan rates by a half point, easing the cost of borrowing and reducing the monthly payment increase for renewals. This should spark housing activity, which accelerated in October and November.

The policy rate is now at the top of the estimated neutral rate range, 2.25% to 3.25%, with more moderate rate cuts continuing into next year. However, monetary policy remains restrictive, as the 3.25% policy rate is still 125 basis points above inflation, which has declined to roughly 2%, the Bank’s inflation target.

Economists have suggested that the tone of the central bank’s press release is more hawkish than before, unsurprising following two consecutive jumbo rate cuts. The Bank continues to say that its future decisions are data-dependent and will be impacted by policy measures taken by the government. In particular, the Bank highlighted the coming GST cuts, dispersal of bonus checks and the significant reduction in immigration. These developments have offsetting implications for inflation.

Governor Macklem signalled that he anticipated “a more gradual approach to monetary policy” in his press conference. We are forecasting 25 bp rate cuts through at least the first half of next year. That would take the overnight rate down to 2.5% by early June, a huge boost to housing that will likely enjoy a strong spring season.

 

 

 

 

 

Monetary policy remains overly restrictive as the 3.75% overnight policy rate remains well above the inflation rate. We expect the overnight rate to fall to 2.5% by April or June of next year. This should continue boosting housing activity, which increased significantly in October and November.

Last week’s GDP data release showed that Canada’s third-quarter GDP grew a mere 1.0%, well below the Bank’s downwardly revised forecast of 1.5%. This, in combination with today’s employment report, bodes well for the Bank of Canada to consider cutting rates by another 50 bps seriously. However, given how aggressive they have been compared to the Federal Reserve, which will undoubtedly cut rates by only 25 bps in late December, they could be satisfied with a 25 bp cut for now.

 

Dr. Sherry Cooper
Chief Economist, Dominion Lending Centres

drsherrycooper@dominionlending.ca

 

Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

Three Overlooked Tools to Save Thousands on Your Home Purchase

General Angela Calla 10 Dec

Three Overlooked Tools to Save Thousands on Your Home Purchase

Buying a home is one of the biggest financial decisions you’ll ever make, but many buyers miss out on valuable tools that can significantly reduce costs. Whether you’re a first-time buyer or looking to upgrade, these three programs can help you save thousands of dollars and make your dream home more affordable.

1. No Property Transfer Tax on New Construction Up to $1.1 Million

•What it Means: Buyers of newly built homes priced up to $1.1 million in British Columbia can avoid paying the property transfer tax (PTT).

•Why It Matters: The property transfer tax is a significant expense, often overlooked during home purchase planning. Avoiding it can save buyers thousands upfront.

Example:

On a $1 million home, the PTT would normally be $18,000. With this exemption, buyers can redirect those funds toward furnishing their new home, reducing other debts, or boosting their savings.

2. CMHC Eco Plus Program – A 25% Insurance Premium Rebate

•What it Means: Buyers of energy-efficient homes may qualify for a rebate of up to 25% on their CMHC insurance premium which is applied for directly through the insurer.

•Why It Matters: Energy-efficient homes not only lower your insurance premium but also reduce long-term utility costs, making homeownership more affordable in the long run.

Example:

•Purchase Price: $700,000

•Down Payment: $70,000 (10%)

•Mortgage Amount: $630,000

•Insurance Premium (4%): $25,200

•Rebate (25%): $6,300

•Final Insurance Premium Cost: $18,900

This program puts thousands of dollars back into your pocket while promoting sustainability.

3. First Home Savings Account (FHSA)

•What it Means: The FHSA is a powerful savings tool designed for first-time homebuyers. Contributions are tax-deductible, and withdrawals used for purchasing a home are tax-free.

•Why It Matters: It combines the best features of an RRSP and a TFSA, allowing for tax-free growth while helping buyers save for a down payment faster.

Example (Opened in 2025):

•Maximum Contribution: $8,000/year, but if the account is opened in 2025, only three years of contributions can be made, totaling $24,000.

•Potential Growth: Assuming a 5% annual return, the account could grow to approximately $25,300, providing a larger down payment without any tax implications.

•For couples, combining FHSA accounts could allow for up to $50,600 in tax-free savings.

Maximizing Your Home Purchase Plan

These programs—when used strategically—can make a significant difference in your overall affordability.

1.Use the FHSA to grow your down payment.

2.Avoid the property transfer tax by choosing new construction.

3.Save on insurance premiums with the CMHC Eco Plus Program.

Take Advantage of Every Opportunity

Navigating the homebuying process can be overwhelming, but with the right guidance, you can maximize your savings and make more informed decisions. As a mortgage expert, I’m here to help you understand these tools and how to integrate them into your home purchase strategy.

Don’t leave money on the table—let’s build your plan together!

 

Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

Top 5 Mortgage Rule Changes in British Columbia

General Angela Calla 10 Dec

Top 5 Mortgage Rule Changes in British Columbia

1. Increase in Insured Mortgage Cap: Effective December 15, 2024, the federal government is raising the insured mortgage price cap from $1 million to $1.5 million. This change allows buyers in high-cost markets like Vancouver to purchase homes up to $1.5 million with a down payment as low as 5% of the first $500,000 and 10% of the balance.

2.Expansion of 30-Year Amortizations: Starting December 15, 2024, all first-time homebuyers and buyers of new builds can access 30-year amortization periods for insured mortgages. This extension aims to lower monthly payments, making homeownership more accessible.

3.Removal of Stress Test for Uninsured Renewal Switches: As of November 21, 2024, the Office of the Superintendent of Financial Institutions (OSFI) has removed the federally required mortgage stress test for straight, stand-alone uninsured mortgage switches at renewal. This change allows homeowners to switch lenders without undergoing a new stress test, potentially securing better rates.

4.Introduction of Insured Refinances for Secondary Suites: Beginning January 15, 2025, eligible homeowners can access insured refinances for up to 90% of their property’s improved value (capped at a $2 million home value) for construction funds. This initiative encourages on-property density and aims to alleviate housing and rental supply issues.

Here’s an example of how the reduced down payment works under the new insured mortgage cap for a $1 million purchase:

Before the Change (Cap: $1 Million)

If the purchase price is $1 million or higher, a 20% down payment is required because homes over $1 million do not qualify for mortgage insurance.

•Purchase Price: $1,000,000

•Down Payment (20%): $200,000

•Mortgage Amount: $800,000

After the Change (Cap: $1.5 Million)

Now that the insured mortgage cap is raised to $1.5 million, buyers can qualify for insured mortgages with a lower down payment.

•First $500,000: Requires a 5% down payment = $25,000

•Next $500,000: Requires a 10% down payment = $50,000

•Total Down Payment: $25,000 + $50,000 = $75,000

•Mortgage Amount: $925,000

 

Savings: This reduces the down payment from $200,000 to $75,000, making homeownership more accessible for buyers in high-cost markets.

 

Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

New Insurer Rules Recap

General Angela Calla 10 Dec

New Rules Recap

As you may already know, we have some great new rules coming into effect on December 15th.

Want a quick recap? Here you go:

30yr amortizations:

Purchase price increase:

  • The purchase price of an insured purchase goes up to $1.5M
  • Downpayment: Remains 5% of the first $500K and 10% of the balance

Have more questions? Reach out to us directly at callateam@countoncalla.ca or 604-802-3983.

 

Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

November Jobless Rate Surges to 6.8% in Canada Despite Strong Jobs Growth

General Angela Calla 10 Dec

The Surge In Canadian Unemployment Keeps Another Jumbo Rate Cut In Play In December

Before the release of today’s Canadian Labour Force Data, the odds favoured a 25 basis point drop in the overnight policy rate when the Bank of Canada meets again on December 11th. The data showed more substantial than expected job creation, as the country added 51,000 net new positions in November compared to the expected rise of 25,000. However, nearly 90% of the job growth was in the public sector, dampening enthusiasm.

Public sector employment rose by 45,000 (+1.0%) in November and accounted for the majority of the overall employment gain in the month. The number of private sector employees and the number of self-employed people were both little changed in November.

The number of public-sector employees grew by 127,000 (+2.9%) in November compared with 12 months earlier. The increase was driven by the public-sector components of health care and social assistance (+81,000) and educational services (+48,000) (not seasonally adjusted). Over the same period, private-sector employment rose at a slower pace (+1.3%; +173,000).

Despite the sharp rise in employment, the jobless rate surged to its highest level in three years, bolstering the case for the BoC to consider another 50 bps rate cut next week. Statistics Canada said Friday that unemployment jumped 0.3 percentage points to 6.8%. The jobless rate is now the highest since January 2017 excluding the pandemic period.

Interest rates fell on the news. Traders in overnight swaps boosted the odds of a 50 basis-point cut at the Bank of Canada’s decision next week at more than three-quarters, from about a coin flip previously. The report was released at the same time as US nonfarm payrolls, which rose by 227,000 while the unemployment rate rose to 4.2%.

The report underscores ongoing labour market softness that had already convinced the Bank of Canada to ramp up the pace of rate cuts with a 50 basis-point reduction in October.

Other details in the report pointed to a slowing economy. Hours worked dipped 0.2%, posting its third decline in the past four months. Also flagging was wage inflation, which cooled considerably. After remaining very strong for months, wage inflation dipped to 4.1% in November, down from 4.9% in October and marking its slowest pace in two years.

After falling for six consecutive months from May to October, the employment rate—the proportion of the population aged 15 and older who are employed—held steady at 60.6% in November. Employment growth in the month kept pace with growth in the population aged 15 and older in the Labour Force Survey (LFS) (+0.2%). On a year-over-year basis, the employment rate was down 1.2 percentage points.

The proportion of long-term unemployed people has increased along with the unemployment rate. In November, 21.7% had been continuously unemployed for 27 weeks or more, up 5.9 percentage points from a year earlier.

The labour force participation rate—the proportion of the population aged 15 and older who were employed or looking for work—increased by 0.3 percentage points to 65.1% in November, offsetting a cumulative decline of 0.3 percentage points in September and October. The participation rate was down by 0.5 percentage points on a year-over-year basis.

Bottom Line

Monetary policy remains overly restrictive as the 3.75% overnight policy rate remains well above the inflation rate. We expect the overnight rate to fall to 2.5% by April or June of next year. This should continue boosting housing activity, which increased significantly in October and November.

Last week’s GDP data release showed that Canada’s third-quarter GDP grew a mere 1.0%, well below the Bank’s downwardly revised forecast of 1.5%. This, in combination with today’s employment report, bodes well for the Bank of Canada to consider cutting rates by another 50 bps seriously. However, given how aggressive they have been compared to the Federal Reserve, which will undoubtedly cut rates by only 25 bps in late December, they could be satisfied with a 25 bp cut for now.

Article courtesy of Dr. Sherry Cooper, Chief Economist, Dominion Lending Centres

 

Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

Click here to view the latest news on our blog. 

December 2024 Newsletter

General Angela Calla 3 Dec

Welcome to the December issue of my monthly newsletter!
As the end of the year approaches, I wanted to have one more check-in with you and provide some final tips for 2024! Scroll down and check out my favourite home and finance resolutions, along with some tips for decluttering your home in preparation for 2025. Have a great month!

Resolutions for Your Home and Finances

As the new year approaches, it’s a natural time to reflect on our personal goals and set resolutions for the months ahead. Your home and finances are key areas where small, intentional changes can lead to big improvements in security, stability, and quality of life.

Here are some resolutions to get you started!

Create a Realistic Home Budget

A well-planned budget is essential for financial peace of mind. Whether you’re new to budgeting or want to refine your approach, creating a realistic budget helps prioritize spending, track bills, and put money toward meaningful goals.

  • Identify Fixed and Variable Expenses: List out fixed costs, like mortgage payments, utilities, and insurance, as well as variable ones, such as groceries and entertainment.
  • Set Savings Goals: Include savings as a “non-negotiable” in your budget, earmarking funds for home repairs, investments, or emergencies.
  • Track and Adjust: Track spending throughout the month and adjust where necessary. Financial apps like Mint or You Need a Budget (YNAB) make it easier to stay on course.

Set Goals to Build Home Equity

Building home equity is a key path to increasing net worth. Whether you’re planning to sell or stay in your home long-term, building equity can offer financial flexibility and security.

  • Make Extra Mortgage Payments: Even a small additional payment toward your mortgage principal each month can shorten your loan term and reduce interest costs. A biweekly payment plan is another effective method to pay down the principal faster.
  • Consider Strategic Home Improvements: Invest in upgrades that boost home value, like kitchen and bathroom remodels, or energy-efficient upgrades like new windows or solar panels. Prioritize improvements that add the most value to your property.

Develop a Plan to Pay Down Debt

Paying down debt (especially after the holidays!) can help free up cash flow. It is key to focus on high-interest debts first, such as credit cards, to maximize your payments.

  • Use the Debt Avalanche or Snowball Method: The avalanche method involves paying off high-interest debts first, while the snowball method focuses on smaller debts first. Choose the one that best fits your motivation style
  • Consider Refinancing or Consolidation: If you have a high-interest mortgage or multiple debts, refinancing or consolidating might reduce interest rates, making debt repayment more manageable
  • Celebrate Milestones: Paying off debt can feel challenging, so celebrate progress. Every milestone achieved brings you closer to financial freedom.?

Commit to Energy Efficiency to Lower Bills

Saving on energy costs can have a significant impact on your budget, especially in colder or warmer months. Simple changes around the home can save you money while benefiting the environment!

  • Invest in Smart Thermostats: A programmable thermostat can automatically adjust heating and cooling based on your schedule, saving energy when you’re not home.
  • Switch to LED Lighting: LED bulbs use significantly less energy and have a longer lifespan than traditional bulbs.
  • Insulate Windows and Doors: Adding weatherstripping to doors and windows keeps drafts out, making your heating and cooling systems more efficient.

Review Your Insurance Policies and Coverage

Insurance is a key element of financial security, but it’s easy to forget about it until something goes wrong. As you head into the new year, this is a great time to make sure you’re fully covered!

  • Assess Homeowners and Mortgage Insurance: Review coverage limits and ensure your policy covers potential risks, including natural disasters if you live in high-risk areas.
  • Shop for Better Rates: Contact your provider for discounts or shop around for new rates. Bundling policies, like home and auto insurance, can often yield savings.
  • Update Beneficiaries and Coverage: Life circumstances change, and your insurance should reflect that. Update your beneficiaries, adjust coverage, and ensure policies align with your financial goals.

Setting resolutions for your home and finances doesn’t have to be daunting! Start with small, actionable goals to help transform your finances – and your mindset – for 2025!

12 Tips for Decluttering Your Space

Decluttering can bring a sense of calm and order to your space, especially as the holiday season approaches.

 

Here are some practical tips to help get organized:

  1. Start Small and Set Achievable Goals: Avoid overwhelm by breaking down the decluttering process into manageable steps. Set realistic goals, such as dedicating just 15 minutes a day to tidying up. Begin with a small area—like a single drawer or shelf—and gradually expand to larger spaces as you build momentum and confidence.
  2. Use the “One-In, One-Out” Rule: For every new item you bring into your home, make it a rule to remove an old one. This simple habit keeps your space from accumulating unnecessary items and helps maintain a balanced, organized environment.
  3. Sort and Categorize with Purpose: Sorting items as you go makes it easier to stay organized and keep track of where everything belongs. Use boxes or bins labeled “Keep,” “Donate,” “Sell,” and “Recycle/Trash” to give each item a clear destination. This method ensures that you can tackle everything in one go without second-guessing.
  4. Focus on Essentials and Joy: When deciding what to keep, ask yourself, “Does this item serve a purpose, or does it bring me joy?” If the answer is no, it’s probably time to let it go. Focusing on essentials and things that spark joy can help you make more meaningful decisions about what truly belongs in your home.
  5. Digitize Paper Clutter: Free up physical space by scanning or photographing important documents and storing them digitally. Use cloud storage or an external hard drive to keep these files secure and easily accessible. This practice reduces paper clutter and provides a backup in case of loss or damage.
  6. Declutter in Layers for Lasting Results: Tackle clutter in layers to avoid feeling overwhelmed. Start with the most obvious items—like broken or rarely used belongings—and gradually work your way through more sentimental or difficult-to-decide items. Revisiting each area multiple times helps you refine your space down to the things you truly need or cherish.
  7. Adopt a “Capsule” Mindset for Clothes and Accessories: Build a capsule wardrobe by focusing on versatile, high-quality clothing pieces that you love and regularly wear. Store out-of-season items separately to keep your main closet neat and functional. This approach simplifies decision-making and can make daily routines smoother.
  8. Set Up Regular Decluttering Routines: Make decluttering a habit by scheduling quick, regular clean-ups—a few minutes each day or a larger session every month. Consistency prevents clutter from building up over time and helps you maintain a tidy, organized space effortlessly.
  9. Involve the Whole Family: Encourage family members to declutter their own spaces and lead by example. Demonstrating the benefits of a tidy, organized home can inspire everyone to participate, making the whole process faster and more enjoyable.
  10. Treat Your Space as “Prime Real Estate”: View the most visible and accessible areas of your home as “prime real estate.” Reserve these spaces for the items you use and love the most, and relocate or discard things that aren’t worth taking up valuable room.
  11. Embrace Simple Storage Solutions: Use baskets, bins, and clear containers to keep your belongings organized and out of sight. Labeling containers makes it easy to find what you need at a glance, keeping everything in order while reducing visual clutter.
  12. Reevaluate Seasonal Items Regularly: After each season, go through holiday decorations, seasonal clothing, and other temporary items to decide what’s worth keeping. Donate, sell, or discard anything you no longer use. This ongoing process will help prevent excess accumulation year after year.

 

These tips can help you create a cleaner, more peaceful environment and build habits to stay organized in the long term. Happy decluttering!

Economic Insights from Dr. Sherry Cooper

There is an unprecedented disparity between the economic and financial situation in the US and Canada. The Canadian economy is far more interest-sensitive than the US and, therefore, slowed more dramatically in response to the Bank of Canada’s restrictive policy to bring inflation back to its 2% target level.

The jobless rate in Canada has reached 6.5%, well above the level in the US, and job vacancy rates have plummeted. Wage inflation has been sticky at 4.9% but will likely edge downward in response to excess supply in the labour market.

Inflation accelerated to 2% y/y in October, compared to the cycle-low 1.6% in September, mainly because gasoline price deflation slowed. The odds of another 50 bps rate cut by the central bank—on the heels of a jumbo cut in October—have diminished, but a 25 bps cut is in the bag.

Market-driven interest rates in Canada are well below those in the US, owing to weaker economic activity and lower inflation. US interest rates surged on the news of the Trump election victory. Ten-year US Treasury yields rose sharply to a post-election high of nearly 4.5% on the presumption that with a Republican majority in the House and the Senate, Trump will move ahead with tax cuts, tariffs and deregulation. Trump has also threatened to limit the independence of the Federal Reserve.

Canadian long-term yields have risen far less since the election. Short-term interest rates are also lower in Canada than in the US. The Bank of Canada has eased monetary policy four times for a total decline in the overnight policy rate of 125 bps, compared to only one rate cut of 50 bps by the Fed. This unprecedented divergence bodes well for a rebounding housing market in Canada.

Housing activity picked up in October and early November in response to the surge in new listings, giving potential buyers a broader range of choices and lower interest rates. The steepening yield curve portends more significant declines in variable mortgage rates—tied to the prime rate, which declines with every cut in the overnight rate, than fixed rates, which move with longer-term bond yields.

The Bank of Canada, concerned about a weakening Canadian economy, will continue to cut the overnight rate at every meeting between now and mid-2025. By then, the policy rate will be roughly 2.5%, half the level at the peak in BoC tightening. This will likely trigger a robust spring housing season.

There is plenty of pent-up activity in the Canadian housing market as buyers have waited for lower interest rates and home prices, and sellers have been reticent to list their properties, hoping for a housing recovery. This is beginning to turn around as every easing move by the Bank of Canada boosts economic activity, particularly in the interest-sensitive housing sector.

 

Angela Calla is an 19-year award-winning woman of influence which sets her apart from the rest. Alongside her team, Angela passionately assists mortgage holders in acquiring the best possible mortgage. Through her presence on “The Mortgage Show” and through her best-selling book “The Mortgage Code“, Angela educates prospective home buyers by providing vital information on mortgages. In light of this, her success awarded her with the 2020Business Leader of the Year Award.

Angela is a frequent go-to source for media and publishers across the country. For media interviews, speaking inquiries, or personal mortgage assistance, please contact Angela at hello@countoncalla.ca or at 604-802-3983.

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