Welcome to the July issue of my monthly newsletter!
Welcome to July, the month of the festival here in Canada! There’s something for everyone, from the Calgary Stampede to Caribana in Toronto and Shambhala in Salmo or even Just For Laughs in Montreal. Or maybe you’re dreaming of getting away from it all – making this newsletter perfect for you!
This month we’re covering vacation homes and backyard projects, both of which will help you escape and unwind.
This month’s fun fact: Did you know both the lightbulb and insulin were invented in July (in 1874 and 1922 respectively) – right here in Canada?
Dreaming of a Vacation Home?
Here’s What You Need to Know?
If you’re interested in buying a vacation home, there is a lot to consider. A good first step to purchasing any vacation home is to think about your 5- and 10-year plan.
Will you get enough use out of it?
Do you have other more immediate or important financial goals?
What’s the opportunity cost?
If you’re set on the vacation home, but don’t plan on paying cash for the property, the next step will be to plan how to finance it. Here’s what to ask yourself:
- Do you have enough saved for a downpayment? A second property could need anywhere between 5-20%+ downpayment. Some factors to consider are if it’s winterized, mortgage insurance requirements in relation to the purchase price, etc.
- Can you afford the purchase? Your income will have to be such that you can take on the additional debt, so consider calculating your debt servicing ratios and see how much room you have within your current situation. Use 39% for GDS and 44% for TDS ratios as the maximum to secure funding from a bank.
- Will the location/property be eligible for financing? Remote locations or properties outside Canada may not qualify for a mortgage, so you might need to get creative.
- Will it be owner-occupied or an investment property? Depending on who lives in or uses the dwelling, there will be different mortgage and tax implications.
If you’re in a good place to move forward with purchasing a vacation home, the next step is selecting a location. A few considerations:
- Current and future development of the area
- Municipal services available
- Transportation to and from your property
- Long term property value
- Seasonal access issues
Another big factor in purchasing a vacation home is deciding what will happen to it while you’re not there. Will you rent it out? Will you have a property manager? What’s needed to keep the insurance valid on the property?
If you’re not sure about any of what you’ve just read, a great first step is to get in touch! As your mortgage broker, I can help you calculate your debt servicing ratios, determine what you’re eligible for, and come up with creative financing solutions if needed. We can look at second mortgages, reverse mortgages, and other options to get you into the property of your dreams.
Summer Backyard Projects
Summer in Canada goes by fast! Make the most of it by spending time in your outdoor space. There are plenty of projects you can undertake to help you enjoy the space you have even more, whether it’s a small patio or a big yard.
Here are some suggestions!
For Patio Space Only:
- Add tiles to the concrete flooring for a grass, panel or wood look (here are a few options)
- Install a pull-down movie screen (or get a folding stand) and add a mini projector to watch movies outside
- Get some planters that hang over your railing and grow an herb garden
- Give it some pizazz by wrapping twinkle lights around the railings
- Furnish with a baby-que to maximize BBQ season and your space (Weber’s Q series might have something that strikes your fancy)
For Small Yards:
- Add small-footprint and storage-friendly games like axe throwing or a mini putt hole for some fun
- Buy a heating lamp for your seating arrangement and make nights more enjoyable
- Build or install a garden box and grow tomatoes, cucumbers, or other veggies
- DIY a bird bath from glassware – a vase, a platter and some crazy glue are all you need to make a pedestal style option (and you might already have everything you need at home!). Here’s how!
For Big Yards:
- Build a catio (cat patio for those not yet in the know) for your feline friends to enjoy the outdoors safely
- Install a permanent fire pit with stones, a fire ring, and even smoke prevention cutouts – like this!
- Pave or tile a seating area for outdoor dining and entertainment
Not enough inspiration here to quench your outdoor project thirst? Take a look through Home Depot’s backyard ideas, complete with materials and DIY instructions to make them happen.
I hope you’re able to get outside and enjoy the nice weather while it lasts. See you back here in August!
Economic Insights from Dr. Sherry Cooper
Canadian economic data have come in weaker than expected since early May. Despite this, markets are not looking for another rate cut in July unless core inflation falls meaningfully. Amid a sizeable trade shock, lingering uncertainty, and a potential war with Iran, the economy’s growth outlook is softer than most forecasters predicted a year ago.
The unemployment rate continues to rise, consumer confidence plummeted in the spring and hesitancy around business investment remains. Despite aggressive easing by the Bank of Canada, housing remains wobbly.
The BoC began lowering interest rates well ahead of many global peers, with a significant 225 basis points of monetary policy easing already in the pipeline. Yes, the BoC was unnerved recently by firmer-than-expected inflation in April. But, critically, that upward surprise likely had more to do with resilient consumer spending, particularly on non-housing-related discretionary services, than with the impact of tariffs.
We also expect a limited impact on inflation from Canada’s retaliatory import tariffs, which means that monetary policy will remain flexible and act as a traditional buffer for the economy. The central bank will need to consider potential additional support that could come from government spending, but overall, it has the room to cut interest rates further if needed.
There are two streams of fiscal support in play in Canada that produce upside risks worth monitoring.
First, Canada maintains meaningful capacity to buffer against economic shocks if required, regardless of the political landscape. Government net debt levels are still low relative to the size of the economy compared to other advanced economies. That is less true compared to the shrinking number of triple-A-rated economies. Still, provincial and federal governments have signalled willingness to step in and support trade-impacted sectors if needed.
This fiscal room provides an important backstop for the economy that shouldn’t be underestimated, particularly compared to its global peers (and the US). Moreover, it is a shift from earlier this year when it appeared Canada might need to buffer a trade shock alone. Now, global peers are engaged in fiscal expansion that helps to maintain Canada’s relative fiscal place.
A formal spending plan has yet to be presented by the newly elected federal government, but there has been movement on a range of items that can provide support to 2025-2026 growth. Action on interprovincial trade barriers could pay long-run dividends, helping to support investment and productivity growth. Tax deferrals, loan programs, and employment insurance measures are available to help trade-related sectors through shorter-run disruptions. And now announcements related to defence could add significantly to growth in 2026.
Second, the US-induced trade shock has turned global attention towards the needs of the global economy in the future, and which countries are best equipped and positioned to support them. Canada’s resources—agriculture, energy, and critical minerals—are increasingly well positioned to support the needs of the global economy, particularly as it seeks to expand AI/data and defence spending.
Canadian exporters appear to be less targeted with specific US tariffs, but they are still tied to the performance of the US economy, particularly in the heavily trade integrated manufacturing sector.
This was a problem for Canada in the immediate aftermath of Liberation Day on April 2. Broad-based global tariffs imposed by the US on all of its trade partners raised the risk of a US recession and, therefore, a Canadian one. However, the de-escalation of US tariffs supports a slow but resilient outlook for the US, improving Canada’s prospects as well.
Problematically, the US’s resilience still appears to mostly come from the exceptionally large government budget deficit and household spending on services with little direct Canadian import content.
In the US industrial sector—where trade ties are much closer—manufacturing employment was down 0.7% year-over-year in May. Early data on job openings shows hiring demand continues to slow as aggressive tariffs on most of the world push costs higher, adding to uncertainty. Still, we do not expect a US recession this year, and that is good news for Canadian exporters who are still, in most cases, able to access the US market duty-free.
The Federal Reserve remained on the sidelines this month despite repeated demands for a rate cut by President Trump. In recent meetings, inflation concerns have precluded the FOMC from reducing rates, although the ‘dot-plot’ portends two rate cuts this year.
In a recent speech, BoC Governor Macklem held to the script, saying that inflation is a threat. He concluded, “My colleagues on the Governing Council and I agreed there could be a need for a further reduction in the policy interest rate if the effects of US tariffs and uncertainty continued to spread through the economy.” But, the latter is still a big “if” in the BoC’s mind. We’ll get two more CPI reports before the July decision (the May report is out next week), and they’ll probably need to see two good ones to consider a rate cut. The market is currently pricing in 25 bps of easing by the end of the year.
“If the current tariffs and counter-tariffs remain in place, historical experience suggests passing through about 75% of the costs of tariffs over roughly a year and a half,” he said. Macklem confessed that underlying inflation is “firmer” than expected, and “If the recent firmness in underlying inflation were to persist, it would be more difficult to cut the policy rate.”
That said, he admitted that the Bank’s preferred measures of inflation (trim and median) “may be exaggerating a little bit” to the upside. Macklem also underscored the negative structural shock Canada must deal with in an increasingly uncertain world. The takeaway from these comments and the recently released BoC minutes was that the Bank is biased in cutting rates again if inflation comes back down and unemployment keeps climbing. How much or how soon is anyone’s guess.
Housing activity continues to disappoint even as the May data showed a modest uptick in sales. New listings have surged, increasing the inventory of unsold homes, particularly condos in the GTA and, to a lesser degree, British Columbia.
The Bank of Canada expected to cut rates further before the end of the year – and with the occasional encouraging sign of progress in US-Canada trade talks – hopes are high that more buyers will step off the sidelines soon.
Bank of Canada governor Tiff Macklem described Prime Minister Mark Carney and US President Donald Trump’s agreement to finalize a new trade and security deal within 30 days as “very welcome news.” However, he also flagged the continuing risk posed to the Canadian economy if tariffs remain in place.
We expect housing market confidence to gradually rebuild as tariff de-escalation lifts some of the uncertainty that hindered activity earlier this year. Still, a tepid labour market and rapidly falling population growth will likely continue hindering short-term market prospects.
Our growth forecasts have been moderately upgraded for the US and Canada. Changes to the Canadian outlook were primarily driven by an increasing likelihood that additional government fiscal deficit spending will add more significantly to growth tailwinds later this year and into 2026.
Canada is also the US’s largest exporter of steel and aluminum products. Existing excess domestic capacity in the US (often at much higher costs) could help, but won’t nearly be enough to fill the supply gap. That means the cost of additional levies will more likely be paid by US buyers than foreign exporters (like Canada).
Canada remains better positioned among major U.S. trade partners as it faces one of the lowest tariff rates thanks to CUSMA exemptions. The first round of trade data post-Liberation Day in April confirmed that nearly 90% of Canadian exports (by our count) continued to access the US market duty-free.
• We have upgraded our Q2 US gross domestic product forecast from 1% to 2.5% annually as we expect a surge in imports in Q1 (a statistical quirk) to reverse. Average growth in the first half of the year is likely a better gauge of economic activities, but it is still slowing. However, The slowing pace is more consistent with the gradual cooling in labour markets than with the beginning of a recession.
• The Canadian GDP growth forecast has been revised higher in 2026 by 0.3 percentage points from 1 to 1.3%. The new Liberal government has announced tax cuts and additional defence spending to meet NATO commitments this fiscal year. Expanded deficit spending will add to GDP growth later in 2025 and into 2026.
• Canadian unemployment rate projections have changed a little. The unemployment rate rose to 7% in May, but early plateauing in job openings suggests hiring conditions have stabilized after softening. It leaves us comfortable with limited further deterioration in the labour market and the unemployment rate to peak at 7.1% in Q3.
• Canadian population growth slowed substantially in Q1 2025, another dampener on housing.
Angela Calla is a mortgage renewal and debt elimination expert with over 20 years of industry experience. She is also a multi-award-winning mortgage professional. Since beginning as a mortgage broker in 2004, Angela has helped thousands of Canadians optimize their mortgage strategies, eliminate debt, and build wealth through real estate.
She is the best-selling author of The Mortgage Code, which equips readers with the tools to make informed financial decisions. Additionally, she is the host of Canada’s longest-running finance radio show on CKNW, where she simplifies mortgage advice and empowers listeners to take control of their financial futures.
Angela has been recognized as Business Leader of the Year (2020) by the Tri-Cities Chamber of Commerce and Entrepreneur of the Year (2019) by the City of Port Coquitlam. She is also a sought-after speaker and educator, delivering accredited training for real estate boards across Greater Vancouver.
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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What This Means for YOU as a First-Time Buyer:
100% GST Rebate if your new home is priced at $1M or less
For Developers & Sellers:
For the Market Overall:
Angela Calla Mortgage Team has helped thousands of first-time buyers navigate programs just like this—and we’re ready to help you make the most of it.
Let’s build a strategy that works for you and your future.
604-802-3983
Full details here: