Happy Monday morning! The Federal government is ramping up the noise amidst dismal polling numbers and a federal election only two years away. We had a cabinet shuffle just a few weeks ago, which included the immigration minister becoming the new housing minister. This week they arranged a housing retreat in Prince Edward Island to brainstorm the path forward. After a barrage of outspoken economists, and a plethora of media attention, the immigration file is finally getting some attention in Ottawa. “The international student program has seen such growth in such concentrated areas that it is really starting to put an unprecedented level of demand, in some instances on the job market, but given the economic conditions we’ve been living with for the past couple of years, you see it in a more pronounced way in the housing market,” said immigration minister turned housng minister, Sean Fraser. When asked about putting a cap on such enrolments, Fraser said it’s one of the options the feds are willing to consider — albeit not at this stage in the game. “I think we should start by trying to partner with institutions to understand what role they may play to reduce the pressure

Happy Monday Morning! Headline CPI inflation surprised to the upside this past week, pushing back up to 3.3% and well above market expectations of 3%. However, those who have been following along here will know the importance of base effects. When headline inflation fell to 2.8% last month we were quick to highlight some research from our good friend Ben Rabidoux, in which he noted, “If CPI averages 0.2% (or 2.4% annualized.. more or less in-line with the Bank of Canada’s target), CPI will be pushing back towards 4% by year end.” Except we didn’t get 0.2% we got an absoloute whopper at 0.6%. The bond market immediately launched yields higher, pushing the all important 5 year Canada bond to it’s highest levels since the summer of 2007. Markets are now fully pricing in one more rate hike from the Bank of Canada before year end, with about a 30% chance of that happening on September 06. In other words, there’s no relief in sight for Canadian households. The longer interest rates stay elevated, the more pain cometh. Remember the mortage renewal wall hits hard in 2024 and 2025. The clock is ticking, and political pressures are mounting on both the

Happy Monday Morning! It’s been a few weeks now since the Trudeau government shuffled his cabinet ministers, naming both a new housing minsiter and a new immigration minister. However, as we discussed a few weeks ago in my piece, Same Faces, Different Places, nothing has fundamentally changed. These are the same people, and the same policy ideas. We are simply rearranging the deck chairs on the Titanic. Despite growing concerns over the levels of immigration in this country, one that is increasing social tensions, overloading public infrastructure, and exacerbating a housing crisis, new immigration minister Marc Miller is doubling down. “I don’t see a world in which we lower immigration targets, the need is too great … whether we revise them upwards or not is something that I have to look at but certainly, I don’t think we will lower them.” Further adding, “Without those skilled workers coming from outside Canada, we absolutely cannot build the homes and meet the demand that exists currently today.” In other words, we need more immigration in order to build the houses to accomodate the new immigrants? There’s just one problem, according to the IRCC (Immigration, Refugees and Citizenship Canada) less than 2% of new