The Canadian Mortgage Brokers Association of Ontario (CMBA Ontario) questions the recent decision by the Bank of Canada to hold its policy interest rate at 2.75 per cent, saying “while we understand (BoC’s) aims in taking a cautious approach to the chaotic tariff situation with the United States, we believe that more direct action is needed to maintain consumer and investor confidence.”

Prioritize homebuying and homebuilding

CMBA Ontario says it favours a cut to the bank’s policy interest rate, which would prioritize Canadian homeowners and those looking to buy. In tandem with eliminating the GST on homes for first-time buyers, an interest rate cut would have further incentivized investment in building new housing supply, improving affordability for all Canadians.

“While we can certainly understand why the Bank of Canada wants to take a cautious approach, we fear that holding rates steady now will do little to encourage confidence in the housing market,” says Michele Campbell, president of CMBA Ontario. “A rate cut would have been a promising signal to both prospective owners and investors, as well as easing costs for those existing homeowners with variable rate mortgages.”

While interest rates remain high, borrowing costs present an obstacle to new investments and new owners. In this way it keeps housing out of reach for many Canadians in two ways – both by reducing the rate of new supply, as well as keeping high the costs of mortgages. CMBA Ontario says it would have supported a rate cut as a means of improving affordability.

Improve investor and consumer confidence

“The reality is that holding rates stable will prevent many Canadians from achieving their dream of homeownership,” adds Campbell. “This isn’t just a decision that only affects the present, either; maintaining the policy interest rate will delay or cancel projects, continuing high prices for Canadians into the future. If we want to realize the federal government’s strategy of making housing more affordable, we need to improve investor and consumer confidence in the housing market. A rate cut could have played a big role in that.”

As Canadians continue to endure this period of economic uncertainty, CMBA Ontario says it remains committed to maintaining a vision of stable and affordable homeownership for all Ontarians. “We will continue to support the policy solutions needed to make that vision a reality.”