A stark warning from Canada’s central bank is reshaping how policymakers think about the country’s housing affordability crisis. Carolyn Rogers, Senior Deputy Governor of the Bank of Canada, delivered a sobering message to Victoria’s business community: monetary policy alone cannot solve the housing problem\u2014and trying risks creating new economic distortions.<\/p>\n
The numbers tell a compelling story. Home prices surged 53% between 2015 and 2025, while incomes grew just 13%. Meanwhile, residential real estate now accounts for roughly half of all bank lending, making the housing sector a systemic financial risk far beyond property values.<\/p>\n
Rogers pointed to a fundamental constraint: interest rates are a blunt instrument. They can influence demand but cannot build homes, rezone land, or accelerate permitting processes. The mortgage stress test, introduced under her tenure at the Office of the Superintendent of Financial Institutions (OSFI) in 2017, strengthened financial resilience but failed to arrest price growth.<\/p>\n
For GTA readers, the implications are clear. Real affordability progress requires federal, provincial, and municipal governments to increase housing supply, improve infrastructure planning, and reduce Canada’s economic dependence on perpetually rising home values. The Bank of Canada’s framework review reveals an uncomfortable truth: the levers that matter most are not within the central bank’s control.<\/p>\n
Read the full article at MPA Magazine<\/a><\/strong><\/p>\n <\/p>\n