Condo Poll finds Vancouverites most willing to make joint purchase of a condo –

VANCOUVER, May 10 /CNW/ – The majority of Vancouverites who recently purchased or intend to purchase a condo say that if they had more money, they would prefer to buy a house instead.  The 2011 TD Canada Trust Condo Poll, which surveyed Canadians who are thinking of buying, or recently bought a condo, found that affordability of condos is a big attraction, especially in Vancouver (64% versus 46% nationally) and for respondents under 35-years-old (62% versus 46% for other age groups).  Vancouverites are more likely than those surveyed in other cities to say they would consider buying a condo with a friend to make purchasing more affordable. Condos seem to be viewed as a stepping stone into homeownership, with many planning to move in the not too distant future.  But, is this a good strategy?

“Especially if you are planning a joint purchase with someone, be clear about your timeline and have a plan in place for the eventual sale of the condo,” advises Barry Rathburn, Manager, Residential Mortgages, TD Canada Trust. “Further, if you are only planning to own a condo for a few short years, calculate the costs that you will incur, such as condo fees, parking fees and moving expenses and work this into your budget.  Depending on how soon you plan to move, these costs could outweigh the equity you’ll build and receive from the eventual sale of your condo. I understand the attraction of owning a property, but in some cases it can make more financial sense to continue to rent while you save for a down payment on the home you really want.” Home Sweet Home – but for how long?

Half of Vancouver respondents expect to live in their condo for three years or less (18%) or four to six years (32%).  Across cities surveyed, the number planning for a short stay is highest amongst respondents under 35.  Nearly one-quarter (22%) of respondents in this age group said they don’t plan to spend more than three years in their condo and another 45% plan to move after four to six years.

Has the tightening of mortgage rules affected the condo market?

Forty-nine percent of Vancouverites said the recent amortization change to 30 years for new mortgages had a significant impact on their decision to choose a condo over other types of homes.

Somewhat alarmingly, the poll found that more than one-quarter (26%) of those intending to buy a condo in Vancouver were not aware of the recent changes to lending rules. “Homebuyers need to have some understanding of the mortgage laws.  If you plan to buy a home, you can possibly save yourself a lot of money in the long run by understanding your options and making well informed decisions about the type of mortgage you choose and the amount of your down payment based on what you can afford,” says Rathburn.  “Familiarize yourself with different mortgage options, so you can weigh the pros and cons of each before making a decision.  There are experts at the bank who can walk you through different mortgage options and help you find the right solution for you, including a variety of flexible mortgage payment features, which can give you the choice to manage your mortgage payments, which is something that you may need in the future.”

What do Vancouverites look for in a condo?

Vancouver residents named good building security as the most important feature to look for in a condominium (98%).  Keeping with the theme of affordability, low condo fees was the second most popular answer (96%).    Eighty-four percent of Vancouver respondents said they were not willing to pay more than $400 in condo fees monthly.  These figures remain consistent with findings from a similar poll conducted by TD Canada Trust in 2010. Other important features were attractive interior design features, available parking and an energy-efficient building (all 93%).

Condos popular with downsizing pre-retirees:

Nationally, those over 50 are attracted to condos because they fit into their plans to downsize their home.  Not surprisingly, when those over 50 move into a condo, 31% don’t plan to move again.  Since they plan to stay put, many over 50 are making their condos as comfortable as possible, with 53% planning to spend more than $10,000 on upgrades (compared to only 15% of those under 35).

“Moving to a smaller, less expensive home can free up money to allow pre-retirees to make some upgrades and enjoy a bit more luxury in their space,” says Rathburn.  “It’s especially important for those who are selling their home to downsize as part of their retirement strategy to make a budget for any upgrades and stick to it. You don’t want to get carried away and spend all the extra money you earned with the sale of your previous home.”

Approximately half of Vancouver respondents are planning to make upgrades to their condo right away (48%).  One-quarter of Vancouverites say they will spend less than $5,000 on these upgrades, 51% will spend between $5,000-$10,000, 18% will spend $10,001-$15,000 and 7% will spend more than $15,000.

About the 2011 TD Canada Trust Condo Poll From March 25 to April 11, results were collected from 806 people in Vancouver, Toronto, Calgary and Montreal, through a custom online survey by Environics Research Group.  Responses were collected from 204 Vancouver residents. Respondents had either bought a condo in the past 24 months, intend to buy a condo in the next 24 months, or considered a condo when shopping for a home.

In a time where identity theft and Ponzi schemes are plastered across the daily news, the last thing you want to worry about is yet another way to lose your hard-earned money.

But as a homeowner, you need to be aware of crimes on the rise known as mortgage fraud and real estate title fraud.

Mortgage fraud

The most common type of mortgage fraud involves a criminal obtaining a property, then increasing its value through a series of sales and resales involving the fraudster and someone working in cooperation with them. A mortgage is then secured for the property based on the inflated price.

Following are some red flags for mortgage fraud:

*             Someone offers you money to use your name and credit information to obtain a mortgage

*             You are encouraged to include false information on a mortgage application

*             You are asked to leave signature lines or other important areas of your mortgage application blank

*             The seller or investment advisor discourages you from seeing or inspecting the property you will be purchasing

*             The seller or developer rebates you money on closing, and you don’t disclose this to your lending institution

“Straw buyer” scheme

Another term for mortgage fraud is the “straw” or “dummy” homebuyer scheme. For instance, a renter does not have a good credit rating or is self-employed and cannot get a mortgage, or doesn’t have a sufficient down payment, so he or she cannot purchase a home. He/she or an associate approaches someone else with solid credit. This person is offered a sum of money (can be as much as $10,000) to go through the motions of buying a property on the other person’s behalf – acting as a straw buyer. The person with good credit lends their name and credit rating to the person who cannot be approved for a mortgage for his or her purchase of a home.

Other types of criminal activity often dovetail with mortgage fraud or title fraud. For example, people who run “grow ops” or meth labs may use these forms of fraud to “purchase” their properties.

                 Title fraud

Sadly, the only red flag for title fraud occurs when your mortgage mysteriously goes into default and the lender begins foreclosure proceedings. Even worse, as the homeowner, you are the one hurt by title fraud, rather than the lender, as is often the case with mortgage fraud.

Unlike with mortgage fraud, during title fraud, you haven’t been approached or offered anything – this is a form of identity theft.

Here’s what happens with title fraud: A criminal – using false identification to pose as you – registers forged documents transferring your property to his/her name, then registers a forced discharge of your existing mortgage and gets a new mortgage against your property. Then the fraudster makes off with the new home loan money without making mortgage payments. The bank thinks you are the one defaulting – and your economic downfall begins.

Following are ways you can protect yourself from title fraud:

*             Always view the property you are purchasing in person

*             Check listings in the community where the property is located – compare features, size and location to establish if the asking price seems reasonable

*             Make sure your representative is a licensed real estate agent

*             Beware of a real estate agent or mortgage broker who has a financial interest in the transaction

*             Ask for a copy of the land title or go to a registry office and request a historical title search

*             In the offer to purchase, include the option to have the property appraised by a designated or accredited appraiser

*             Insist on a home inspection to guard against buying a home that has been cosmetically renovated or formerly used as a grow house or meth lab

*             Ask to see receipts for recent renovations

*             When you make a deposit, ensure your money is protected by being held “in trust”

*             Consider the purchase of title insurance

It’s important to remember that if something doesn’t seem right, it usually isn’t – always follow your instincts when it comes to red flags during the home buying and mortgage processes.

With interest rates still sitting near historically low levels – with nowhere to go but up – now is an ideal time for first-time homebuyers to embark upon homeownership.

But if low interest rates still don’t tip the scales on your decision to enter the property market, perhaps the information below will.

Down payment

The main reason many renters feel they can’t afford to purchase a home has to do with saving for a down payment. But there are many solutions available today that can help first-time buyers with their down payments.

Many lenders will allow for a gifted or borrowed down payment. And of those lenders that will not provide this alternative, many offer cash-back options that can be used as a down payment.

Better yet, there are programs available from some financial institutions where they will offer a “free down payment” or a “flex down”. Of course, you will end up paying about 1% more in your interest rate, but the program will help you get in the homeownership door and start accumulating equity earlier. The only catch, however, is that you must remain with the original lender for the full initial five-year term or else you’ll have to pay the down payment back.

Under the RRSP Home Buyers’ Plan, first-time homebuyers can withdraw up to $25,000 from

                 their RRSPs for a down payment – tax- and interest-free.

And if there’s a couple making a home purchase together, they can each withdraw up to $25,000 from their RRSPs.

Making an informed decision

There’s an endless amount of information available to prospective homeowners – through the Internet, friends, family members and anyone willing to voice their opinion on a given subject. What you need, therefore, is education and coaching as opposed to being bombarded with more information.

That’s why it’s important to speak to me – a mortgage professional – in order to get a pre-approval prior to setting out home shopping. This will help set your mind at ease, because many first-time buyers are overwhelmed by the financing and buying processes, and often don’t know what it truly costs to purchase a home. I can provide you with real examples that can go a long way in showing you what it really costs to buy a home in your area versus what you’re currently paying in rent.

You may be pleasantly surprised by how manageable it is to start building equity in your own property as opposed to helping pay someone else’s mortgage each month!

As always, if you have any questions about down payment options or your mortgage in general, I’m here to help!

Higher Canadian rates, sooner. That’s what the markets figured out this week and that’s what is powering the Canadian dollar. Sometimes when you see a big market reaction you know it’s probably an over-reaction and you can ignore it – but not this time.

Let’s start with a little tutorial (no, please keep reading, it will be brief) and then we’ll talk about why this week’s economic data changes everything, more or less.

The Bank of Canada sets the benchmark overnight rate (the rate at which banks lend to each other). That in turn affects market interest rates on everything from mortgages through to business loans. At present, the overnight rate is at 1 percent, following three hikes of 25 basis points each last year.

The tutorial is on the ‘output gap’ which is one of the major tools that the Bank of Canada looks at to set monetary policy. Here goes.

The ‘output gap’ refers to the difference between the actual output of the economy and the potential output. Potential output basically refers to the maximum that could be produced if all inputs (like the labour force, technology, capital, factory space and all that) were used to the fullest extent that they can be without triggering inflation.  That last little bit is key: when the bank says ‘potential’ they don’t mean full potential, they mean ‘potential without forcing prices higher’. It is a similar concept to what economists mean when they say ‘full employment’. In that case it does not mean everyone working, it means everyone working that can be working without wages being forced higher.

The Bank of Canada monitors the output gap as best they can, first by estimating what potential output is in any period of time, then estimating how close to potential the economy looks to be. A positive output gap means the economy is operating above potential, and that inflation is a risk. A negative gap means there is excess supply (for example, too many unemployed workers) and that inflation is not a risk, or at the extreme, that deflation is possible.

The Bank of Canada adjusts policy to try to get keep things in balance and the output gap closed – sort of a ‘not too hot, not too cold’ thing. Based on their most recent calculations, their latest estimate (which was contained in last week’s Monetary Policy Review) was that the output gap would close by the middle of 2012.

Everybody still with me? Good. Here’s the thing: as well as looking at the output gap itself, the Bank also looks at a bunch of economic indicators to see how close to capacity the Canadian economy is running. Things like industrial production, the unemployment rate, unfilled manufacturing orders – and inflation.

That last one is probably the most important, and it is the one that seems to be running most out of sync with where the Bank of Canada thought it would be. In the Monetary Policy Report, the Bank said that the overall inflation rate (which they target to be 1 to 3 percent) would peak at 3 percent in the second quarter. This week, we got the March inflation report, and we find out that the inflation rate was 3.3 percent as of March –  which is decisively in the first quarter. Ouch.

So what does this mean? It means something has to change to keep the Canadian economy from overheating. That something is likely to be Canadian interest rates, and when I say ‘change’ I mean ‘go higher’.

If rates do not go higher, then the output gap is at risk of going into positive territory, which means inflation takes off even more. No way is the Bank of Canada going to let that happen.

There are other things to take into account too – the spiky Canadian dollar is an important one – but it does not take away from the big picture.

Big picture? A rate hike by July, and maybe more to come after that. And yes, watch the loonie soar in the meantime

Canadians can now get their individual Financial Fitness Score to help discover how financially fit they are courtesy of Genworth Financial and the Canadian Association of Credit Counselling Services (CACCS).

This new Financial Fitness Score, the first of its kind in Canada, is available online at www.financialfitness.ca <http://click.icptrack.com/icp/relay.php?r=14777983&msgid=371287&act=G0OG&c=191858&destination=http%3A%2F%2Fwww.financialfitness.ca> . The score is based on attitudinal and behavioural questions that were developed from financial fitness data collected in a survey sponsored by Genworth Financial and CACCS. The tool helps people determine how well they’re managing their finances and provides useful information that is based on their fitness level.

“Having a firm understanding of what it means to manage your money is so important to peace of mind,” said Henrietta Ross, CEO of CACCS. “It’s quick, easy and free, but so rich in value. Understanding your score and what you can do to improve your situation is very empowering.”

The fitness tool is just one of a series of initiatives provided by Genworth Financial in collaboration with CACCS, and was launched as part of the recent Homeownership Education Week events.

Whether it’s a duplex, a cottage or a Florida getaway, a second property can be a rewarding investment over time. But if you’re not careful, it can prove taxing as well. A little planning goes a long way.

The following are some common mistakes financial planners see in their practice, as well as some tips for minimizing the tax hit.

If you borrow money to buy or repair a rental property, make sure you arrange things so that the interest on the loan is tax deductible. That means keeping mortgages and lines of credit for the rental property completely separate from loans taken out to buy or improve your principal residence, which are not tax deductible.

“You can’t unmix money,” says Warren Baldwin, Regional Vice President of financial planning firm TE Wealth in Toronto.

Click here <http://click.icptrack.com/icp/relay.php?r=14777983&msgid=371287&act=G0OG&c=191858&destination=http%3A%2F%2Fwww.theglobeandmail.com%2Fglobe-investor%2Fpersonal-finance%2Ftax-centre%2Feasing-the-tax-hit-for-investment-property-owners%2Farticle1993437%2F>  for the full Globe and Mail article.

Canadian household debt loads hit record territory this year, surpassing even levels south of the border. A new Statistics Canada paper <http://click.icptrack.com/icp/relay.php?r=14777983&msgid=371287&act=G0OG&c=191858&destination=http%3A%2F%2Fwww.statcan.gc.ca%2Fpub%2F11-008-x%2F2011001%2Farticle%2F11430-eng.pdf>  out last Thursday sheds some light on just who’s most indebted and why.

First, the aggregate numbers: household debt for Canadians more than doubled between 1984 and 2009 – from $46,000 to $110,000, largely due to mortgage debt. Growth has accelerated even faster since 2002 (it’s continued to climb this year, though economists expect the rate of accumulation will slow as borrowing costs rise).

The paper, by senior analyst Matt Hurst, lists several reasons for the surge. Some are familiar – low interest rates and a cultural shift to consumerism. Others include increased demand in the housing market from the boomers, heightened competition and deregulation in the banking sector, new financial products, more relaxed credit constraints and more women in the workforce.

More than three quarters, or 76%, of Canadians carried debt in 2009 and, among those who did, the average load was $119,000.

Click here <http://click.icptrack.com/icp/relay.php?r=14777983&msgid=371287&act=G0OG&c=191858&destination=http%3A%2F%2Fwww.theglobeandmail.com%2Freport-on-business%2Feconomy%2Feconomy-lab%2Fdaily-mix%2Fyounger-families-most-snared-by-debt%2Farticle1994548%2F>  to read more in the Globe and Mail.

Canadians struggling to save and pay off debt; 38 per cent have no savings

LuAnn LaSalle, The Canadian Press

Many Canadians are finding themselves caught between the struggle to save money and repay their debts, says a survey from TD Bank.

And with interest rates expected to rise this summer, clearing debts probably won’t get any easier. In the report, 38 per cent of Canadians surveyed said they had no savings at all.

“I think it’s worrisome,” said Carrie Russell, senior vice-president of retail banking at TD Canada Trust “The reality is that we are all going to come into unexpected expenses from time to time, be it a car or health or a job loss and this can really derail you and your family if you have no cushion behind you,” Russell said from Toronto.

Russell said the major factor preventing Canadians from saving is that they are using disposable income to pay down debt, whether it be credit cards, car loans or mortgages.

She recommends a cushion of three to six months of income saved to get through unexpected financial shocks.

One-third of Canadians who responded to the recent online survey also said they didn’t have enough money to cover living expenses like rent or food bills.

The survey found that 54 per cent of the 1,003 people who took part in the survey said it was a real struggle or impossible to save.

Repaying those debts will only get harder if the Bank of Canada raises interest rates this summer, as expected. A spike in Canada’s inflation rate in March was driven by higher food and gasoline prices.

Shopping is also taking a toll on tucking money away for a rainy day.

Russell said 12 per cent of those surveyed said they couldn’t save because “they shopped beyond their means.” Nineteen per cent of those surveyed under the age of 35 said they spent too much on shopping, she added. “This really comes down to the age-old question of budgeting, choices and skills required in making plans for a healthy financial future.”

Changing habits starts with children and making sure they understand how much things cost and understanding the difference between a “want” versus a “need,” she said.

“We don’t send our children into the deep end of the ocean without teaching them how to swim. We shouldn’t send our children out into the workforce and independent lives without giving them the basics of financial literacy.”

On the flip side, 30 per cent of respondents said they had enough money saved to cover living expenses for at least four months.

Russell said those who were most successful with savings were “paying themselves first” and using automatic savings programs to put money aside.

Certified financial planner Marta Stiteler had some tough love for Canadians without nest eggs: learn to live with less and start saving every month even if it’s just $50.

“People are using the downturn as an excuse,” said Stiteler, an associate at Pillar Retirement in Hamilton, Ont..

“The reality is you just have to bite the bullet and save. If you don’t save you’re going to spend it because your lifestyle will eat up that money,” she said. “It’s about discipline.”

The Vanier Institute of the Family has said that average family debt in Canada hit $100,000 in 2010.

“I do think many families are behind the eight ball and the public supports really aren’t there where they once were,” said Katherine Scott, director of programs at the Ottawa-based organization.

Scott said local credit and non-profit agencies can provide resources to help families get a financial plan so they can “start to dig themselves out of that hole.”

The online survey, based on a representative sample of Canadian adults, was conducted from Dec. 2 to Dec. 7, 2010, by Environics Research for the bank. http://ca.finance.yahoo.com/news/Canadians-struggling-save-pay-capress-2491348161.html?x=0

Good Morning,

As suspected rates have held steady this morning, meaning no change to variable rate mortgages or lines of credit with the current payments. Fixed interest rates (which are tied to the bond market) have been on the rise over the last week on average 30 basis points. With timing being a key componet to financial freedom we encourage you to ensure that anyone with a renewal or shopping for a home had a rate held in for as long as possible to have the most amount of options moving forward. Should you have any questions, require a rate hold for you or someone you care about, or ensure you have the mortgage to result in the most savings please email us today at acalla@dominionlending.ca. This morning’s press release from this morning is below.

Have a good week.

Bank of Canada maintains overnight rate target at 1 per cent

OTTAWA –The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent.

As anticipated in the January Monetary Policy Report (MPR), the global economic recovery is becoming more firmly entrenched and is expected to continue at a steady pace.  In the United States, growth is solidifying, although consolidation of household and ultimately government balance sheets will limit the pace of the expansion.  European growth has strengthened, despite ongoing sovereign debt and banking challenges in the periphery.  The disasters that struck Japan in March will severely affect its economic activity in the first half of this year and create short-term disruptions to supply chains in advanced economies.  Robust demand from emerging-market economies is driving the underlying strength in commodity prices, which is being further reinforced by supply shocks arising from recent geopolitical events. These price increases, combined with persistent excess demand conditions in major emerging-market economies, are contributing to the emergence of broader global inflationary pressures.  Despite the significant challenges that weigh on the global outlook, global financial conditions remain very stimulative and investors have become noticeably less risk averse. 

Although recent economic activity in Canada has been stronger than the Bank had anticipated, the profile is largely consistent with the underlying dynamics outlined in the January MPR.  Aggregate demand is rebalancing toward business investment and net exports, and away from government and household expenditures. As in January, the Bank expects business investment to continue to rise rapidly and the growth of consumer spending to evolve broadly in line with that of personal disposable income, although higher terms of trade and wealth are likely to support a slightly stronger profile for household expenditures than previously projected.  In contrast, the improvement in net exports is expected to be further restrained by ongoing competitiveness challenges, which have been reinforced by the recent strength of the Canadian dollar.

Overall, the Bank projects that the economy will expand by 2.9 per cent in 2011 and 2.6 per cent in 2012. Growth in 2013 is expected to equal that of potential output, at 2.1 per cent. The Bank expects that the economy will return to capacity in the middle of 2012, two quarters earlier than had been projected in the January MPR.

While underlying inflation is subdued, a number of temporary factors will boost total CPI inflation to around 3 per cent in the second quarter of 2011 before total CPI inflation converges to the 2 per cent target by the middle of 2012. This short-term volatility reflects the impact of recent sharp increases in energy prices and the ongoing boost from changes in provincial indirect taxes. Core inflation has fallen further in recent months, in part due to temporary factors. It is expected to rise gradually to 2 per cent by the middle of 2012 as excess supply in the economy is slowly absorbed, labour compensation growth stays modest, productivity recovers and inflation expectations remain well-anchored.

The persistent strength of the Canadian dollar could create even greater headwinds for the Canadian economy, putting additional downward pressure on inflation through weaker-than-expected net exports and larger declines in import prices.

Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. This leaves considerable monetary stimulus in place, consistent with achieving the 2 per cent inflation target in an environment of material excess supply in Canada. Any further reduction in monetary policy stimulus would need to be carefully considered. 

Information note:

A full update of the Bank’s outlook for the economy and inflation, including risks to the projection, will be published in the MPR on 13 April 2011. The next scheduled date for announcing the overnight rate target is 31 May 2011.

JEREMY TOROBIN – The Globe and Mail

As the recovery gains momentum, it’s increasingly clear a summer interest-rate hike is in the cards, even if Mark Carney is very unlikely to touch borrowing costs this Tuesday.

And for the first time in more than a decade, one of the Bank of Canada’s most effective tools for signalling to borrowers and financial markets that rate moves are coming – the quarterly Monetary Policy Report – will arrive smack-dab in the middle of a federal election campaign, between the leaders’ debates, no less.

As a result, while the central bank is an independent institution and Mr. Carney will give his assessment of the economy’s progression as he sees it, the Governor’s messaging might be more nuanced and subtle than usual.

There’s not much the central bank can do to keep any element of Wednesday’s report – a forecast paper full of commentary backed by charts, graphs and statistics – from becoming fodder for the campaign, with the party war rooms eager to co-opt any outside “proof” that their approach to the economy makes the most sense. Conservative Leader Stephen Harper might argue that a sunnier outlook shows his party deftly steered the country out of recession and now deserves a majority, or that a cautious tone shows this is no time to change governments. Liberal Leader Michael Ignatieff could point to an improved forecast as “evidence” that the country can afford to forego corporate tax cuts without fear of costing jobs.

That’s all par for the course, and as long as Mr. Carney says nothing that could be construed as actively endorsing a particular position, the rest is out of his hands.

“Politicians may try to leverage whatever the Bank says, but [central bank governors are] independent for a reason – because they need to do what’s right for the economy,” said Eric Lascelles, chief economist at RBC Asset Management in Toronto.

Similarly, David Laidler, a former adviser at the Bank of Canada who is now an economics professor emeritus at the University of Western Ontario, said while Mr. Carney and his rate-setting panel have likely looked at their drafts line-by-line “with a don’t-get-the-Bank-into-political-trouble lens,” they also have to “do it as they see it.”

The real trick for Mr. Carney will be to convey (a) that the Canadian and U.S. economies are growing more quickly than expected, (b) that even though inflation is tame right now it could soon become less manageable without tighter policy and, (c) that Canadians must therefore step up efforts to trim their debt before rates go up – all without thrusting himself into the campaign by giving voters the wrong impression that an endless stream of crushing mortgage hikes, for example, is just around the corner.

Luckily for Mr. Carney, there are still so many trouble spots that could trip up the global recovery (Libya, Portugal and Japan, to name a few) that there’s little urgency to raise rates right now.

The central bank wouldn’t hesitate to move rates mid-campaign if it felt that were absolutely necessary, as it did in October, 2008, when Mr. Carney joined other Group of Seven policy makers in a co-ordinated, surprise reduction after Lehman Brothers collapsed. But in the current context, when it’s still a judgment call, and with the loonie well above parity with the U.S. dollar, it’s hard to imagine Mr. Carney taking the risk of being accused of interfering with the election.

Though most economists say the next increase is more likely in July than in May, the quarterly forecast is one of the better opportunities Mr. Carney will have between now and then to reinforce the message that rates are lower than he’d like them to be. The report – which will undoubtedly include upgraded forecasts for the Canadian and U.S. economies, if not the rest of the world – could also show that the central bank expects the slack left in the economy by the recession will be taken up much sooner. That would imply a faster-than-expected path back to a more normal footing.

Most economists say the “neutral” rate for monetary policy is somewhere between 3 and 4 per cent. In theory, Mr. Carney needs to boost his benchmark from the current 1 per cent to something like neutral before the slack in the economy is all gone or else inflationary pressures could get out of control. The last forecast in January said that breaking point would be at the end of next year, but many analysts now predict it will come sooner.

In a sense, Mr. Carney has spent much of the recovery walking a fine line between a strengthening domestic economy and on-again-off-again rebounds south of the border and across the Atlantic. Since October, when he paused after three consecutive increases, the Governor has repeatedly said “global uncertainties” warrant caution. At the same time, he has urged households to slash their debt before it becomes more costly, hinting that if Canada was not an export-driven economy, he would be raising rates much faster.

Still, Mr. Carney’s poker skills could be put to the test on Wednesday, when he and senior deputy governor Tiff Macklem hold a press conference in Ottawa to answer reporters’ questions about their forecast.

In keeping with standard practice at the central bank, Mr. Carney scrapped a press conference he was scheduled to hold in Calgary just days after the election was called. The MPR press conference, however, takes place no matter what.

It’s pretty far-fetched to imagine Mr. Carney, who has more than earned the extraordinary amount of respect he enjoys among his arm’s-length political masters, becoming another John Crow, whose laser focus on inflation was blamed for Canada’s last recession and who was pushed out by the Chrétien Liberals after the 1993 election.

But fears of rampant rate increases would make the electorate much more volatile, hurting the Conservatives more than anyone, as they are the incumbents.

That means even if central bank watchers can glean from Mr. Carney’s forecast that a number of rate increases are on the way, he’ll probably wait until well after May 2 to spell that out.