They say Canada isn’t as dependent on the U.S. as it once was. Nonetheless, exports of our automotive products have fallen 23% over the last three months, the largest decline since the end of the U.S. recession in 1982. Exports of non-automotive consumer goods have fallen 13.8% in the same timeframe, “the largest decline for the nearly 30 years we have data,” says TD senior economist Richard Kelly.
All of this explains partly why the Bank of Canada cut rates 1/2% on March 4. Now economists are expecting another 1/4% to 1/2% drop in prime rate on April 22.
It’s sad that our economy is at risk to this degree, but there is a bright side from a mortgage perspective. It’s truly a great time in history to be in a variable-rate mortgage. (Just make sure you’re not adverse to locking in if need be.)
Last modified: April 25, 2014
It seems like Canada is cutting interest rates agressively because the US is cutting them. Yet Canada has a much better economy than the US. I would be surprised if Canadian interest rates did not rise in a year or so as our econony resumes its course.