Friday’s GDP report saw new levels that indicate the housing boom is doing more than just providing unaffordable homes for wealthy buyers. Canada’s economy is at a standstill and bank lending, accompanied by Vancouver and Toronto’s housing market is helping keep it afloat.
Real estate and financial services make up 20 per cent of the economy, a percentage that hasn’t been recorded since the early 1960s. But this might not be the best news, since Canada has ended up in record household debt. Policy makers are under pressure to slow the price increase that makes home buying less of a possibility for many Canadians.
The GDP also shared data that Canada’s economic expansion reached an incredibly low expansion of 1.2 per cent. This is compared to previous years of typically expecting a growth of at least 5 per cent in the span of two years. Canada’s economy has essentially hit a halt over the last 10 months, mostly due to Alberta wildfires in May and the impact on oil production.
Despite these disappointing numbers, expectations are that this information will bring a sense of urgency from Prime Minister Justin Trudeau and Finance Minister Bill Morneau to push towards positive growth for 2017.
