Cindy Faulkner Mortgage Broker/Owner

Cindy Faulkner

Mortgage Broker/Owner

501 15989 108TH AVE, SURREY, , British Columbia







Interest Rates - Q3 2016 Economic Update with Michael Campbell


The following is an excerpt of the Economic Update for Q3 2016 released by VERICO’s Economic Consultant Michael Campbell. 

Read the full report on the VERICO blog



The biggest immediate impact of the UK vote and the rise of anti-EU parties will be on the currency markets because the euro will no longer be seen as an alternative to the US dollar. 


The European Union’s uncertain future assures that money will flow out of the euro for years to come and the first choice will be the US dollar.


Every currency including the loonie will fall versus the greenback but don’t worry because the Canadian dollar will be stronger versus the euro and pound.


I’ve been predicting for years that money flowing out of Europe and into the US will fuel a major bull market in quality American stocks.


Another important consequence of Brexit is that the uncertainty in Europe is a negative for global economic growth, which is already slow.


That in turn will diminish demand for oil, which will bring prices lower unless there’s a major supply disruption.


Translation – the recovery in Alberta will be slow, which will be negative for employment growth and the real estate recovery in that province.  


Interest Rates


The Federal Reserve is dying to raise rates but the economic performance both in the US and globally doesn’t warrant it. And now the uncertainty in the UK and European Union will force them to continue to play the waiting game.


In Canada there is absolutely no economic pressure to raise rates.


Stephen Poloz must be lying awake at night dreaming of the days when the economic growth will be strong enough to be called mediocre. I say dreaming because outside of BC – there’s not many happy places.


And that’s not going to change as long as the three levels of government combine to take increasing amounts of money out of people’s wallets.


One month it’s increased property taxes, the next a jump in payroll taxes and higher fees for government services the month after that. Throw on an increasingly expensive regulatory burden and the recipe for slow motion growth is place.  


The bottom line is that there are no factors that merit pushing interest rates higher in Canada.  


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