Hernan Parada

Highlights In 2021, 1.65 million households comprised of roommates or extended family sharing living space. These households were about evenly split between those with roommates and those with extended family, each group representing about 800,000 households. One in five households with roommates or extended family members (21.7%) was living in a crowded dwelling, compared with 3.4% of other households. In contrast, households with roommates or extended family members (16.7%) were less likely to be in unaffordable housing than other households (21.5%). About 900,000 people lived with extended family without contributing to housing costs, and almost half (47.5%) of them had no income or an income of less than $30,000. Just under 400,000 people lived with non-relatives without contributing to housing costs, and over one-third (36.6%) of them were living in poverty. Estimates of the number of people in shared housing experiencing housing instability or unmet housing need varied depending on the criteria used to define these concepts. One estimate suggested that 71,000 people had several risk factors for housing instability or unmet housing need, including living with non-relatives, not contributing to housing costs, having an income of less than $30,000 or living in poverty, and residing in a crowded dwelling. Another estimate indicated that just under 1.7 million people could be experiencing housing instability or unmet housing need when defined solely by living in a crowded dwelling. https://www150.statcan.gc.ca/n1/pub/46-28-0001/2025001/article/00001-eng.htm

As widely expected, the Bank of Canada lowered its target for the overnight rate by 25 basis points to 3.0%. This sixth consecutive cut brings cumulative rate relief to 200 basis points since June 2024 and pushes the BoCs overnight target 150 bps below the Feds. The last time this gap was larger was way back in 1997. Note that the Bank will also be setting the deposit rate 5 bps below the target, a move designed to relieve some of the upward pressure on CORRA. Consistent with Toni Gravelles speech earlier this month, the Bank announced an end to QT with asset purchases (term repos) starting in early March. Initial term repo sizes will range between $2 billion and $5 billion. Here are some additional highlights from the communique and the opening statement to the press conference: Driving the decision to cut 25 bps was inflation around 2% and an economy in excess supply. As for forward rate guidance, you really wont find any. The opening statement to the presser simply acknowledges the tightrope theyll be walking: We will need to carefully assess the downward pressure on inflation from weakness in the economy, and weigh that against the upward pressure on inflation from higher input prices and supply chain disruptions. Absent tariff action, the BoC expects GDP growth to strengthen in 2025 (vs. 2024) with growth a bit above potential this year. Again, ignoring tariff threats, upside and downside risks are reasonably balanced. As for the labour market, the statement reiterates that Canadas labour market remains soft although they acknowledge job growth is picking up. On wage growth, they see some signs of easing. The Bank highlights that headline inflation is close to 2% with some volatility associated with the GST/HST holiday. Highlighting a broad range of indicators they note that underlying inflation is also close to 2% and is forecast to stay there over the next two years (absent tariffs). Note that the relatively hotter CPI-Median and -Trim werent mentioned. As for recent Canadian dollar weakness, the rate statement attributes it mostly to trade uncertainty and broader strength in the USD. In other words, its less to do with BoC-Fed divergence. https://www.nbc.ca/content/dam/bnc/taux-analyses/analyse-eco/boc-policy-monitor.pdf