Written by: Dr. Sherry Cooper

Home Sales Rose As Prices Stabilized–Housing Market is Turning a Corner

The number of home sales recorded over Canadian MLS® Systems rose 2.8% on a month-over-month basis in June 2025, building on the 3.5% gain recorded in May. Over the past two months, the recovery in sales activity has been led overwhelmingly by the Greater Toronto Area (GTA), where transactions, although remaining historically low, have rebounded by a cumulative 17.3% since April. “At the national level, June was pretty close to a carbon copy of May, with sales up about 3% on a month-over-month basis and prices once again holding steady,” said Shaun Cathcart, CREA’s Senior Economist. “It’s another month of data suggesting the anticipated rebound in Canadian housing markets may have only been delayed by a few months, following a chaotic start to the year; although with the latest 35% tariff threat, we’re not out of the woods yet.” New Listings New supply declined by 2.9% month-over-month in June. With sales up and new listings down, the national sales-to-new-listings ratio rose to 50.1%, up from 47.3% in May. The long-term average for the national sales-to-new listings ratio is 54.9%, with readings between 45% and 65% generally consistent with balanced housing market conditions. There were 206,435 properties listed for sale on Canadian MLS® Systems at the end of June 2025, up 11.4% year-over-year and just 1% below the long-term average for that time of the year. “Most housing markets continued to turn a corner in June, although market conditions still vary considerably depending on where you are in Canada,” said Valérie Paquin, CREA Chair. “If the spring market was mostly held back by economic uncertainty, barring any further big shocks, that delayed activity could very likely surface this summer and into the fall.” Home Prices The National Composite MLS® Home Price Index (HPI) was little changed (-0.2%) from May to June 2025, following three straight month-over-month declines of closer to 1% in February, March, and April. The non-seasonally adjusted National Composite MLS® HPI was down 3.7% compared to June 2024. Based on the extent to which prices fell off in the second half of 2024, expect year-over-year declines to shrink in the months ahead. Bottom Line There is every indication that the housing markets in the GTA and the GVA are beginning to perk up following a disappointing Spring market. Sales generally increased in May and June, and new listings fell last month. The price data suggest a flattening in prices. Tariff uncertainty has swamped the psychology of many potential buyers, who are reticent to make a move. The latest 35% tariff threat from Washington doesn’t help. And while the central bank was expected to lower interest rates further, it took a pass at the prior two meetings and is likely to do so again on July 30th when it meets. This morning’s CPI release for June showed a continued rise in core inflation, effectively ruling out a BoC rate cut. Moreover, longer-term interest rates are market-driven and have been trending higher since March, when tariff sabre-rattling began in earnest. Canada’s five-year government bond yield broke above its key 3% support level in the past week. This could well trigger another rise in fixed mortgage rates. Furthermore, the Canadian two-year yield is 2.83%, which is above the Bank’s overnight policy rate of 2.75%. This suggests that monetary easing in Canada may be over for this cycle, provided the economy remains resilient. Of course, given the TACO issue (an acronym that stands for Trump Always Chickens Out), any forecast bears more than the usual uncertainty.

Written By: Zak Khan of REW Will your mortgage change if the BoC’s interest rate does? Every few months, the Bank of Canada (BoC) announces an interest rate hold, cut or raise, depending on the current and anticipated future economic conditions. But while these announcements get a lot of buzz, what exactly is the impact, if any, on your mortgage as a homeowner? And if you’re thinking of buying a home, will they affect the amount you end up paying at the end of the month? To understand what the Bank of Canada interest rate actually is, we have to define some terms. The interest rate being referred to when the BoC makes an announcement is the benchmark overnight rate. This value determines how much it costs Canada’s banks to borrow money from each other at the close of each business day. Banks are always sending money back and forth between each other. Whether that is for Interac e-transfers, payments to businesses, to settle accounts and much more. To balance their books at the end of the day, banks have two options: they can borrow money from each other or from the Bank of Canada itself. The first option is subject to the overnight rate, and the second is subject to the much-less talked about deposit rate. For the sake of simplicity, we’ll discuss the overnight rate in this article, as it gets the most coverage and has the most potential impact on the housing market.  

How does the overnight rate impact mortgage rates?

The overnight rate does impact mortgage rates, but it’s a little more complicated than it seems. Depending on whether you have a fixed or variable rate mortgage, the BoC’s interest rate announcement will affect your mortgage in different ways.  

Variable rate mortgages.

Lenders set their variable rate mortgages’ interest rate based on the BoC’s overnight rate. That means if there’s a rate cut, your mortgage’s interest rate goes down and if there’s an increase your mortgage’s interest rate goes up. Depending on the payment plan you have in place, this could either mean your payments go up if the BoC increases rates, or a greater portion of your payment goes toward interest, rather than principal. If there’s a cut, your payments could go down or you might pay more toward the principal. Ask your mortgage broker or lender to be sure.  

Fixed rate mortgages.

The impact of the BoC’s interest rate announcements is less direct on fixed rate mortgages than variable rate mortgages. After all, as the name suggests, your interest rate is fixed at a certain value and won’t change until it is time to renew your mortgage. But for new borrowers, or if it is time to renew and you’re considering another fixed rate mortgage, the BoC’s interest rate announcements will affect fixed mortgage rates in a more roundabout way. That’s because fixed rate mortgages are tied to the bond market. The bond market is where bonds, or promises by an issuer to pay money to the holder of the bond, are traded. In this case, it’s the government issuing the bond. Lenders use five-year bond prices to set their fixed rate mortgage rates. If the BoC cuts rates, it means inflation is going down which increases the value of the bonds investors are holding, and that also means more people buy bonds. All of this leads to the decrease in bond yields, which helps push down fixed rates. If the BoC raises rates, the opposite happens. As a result, fixed rate mortgages go up. Overall, fixed rate mortgages’ interest levels tend to lag a bit behind whatever the market is doing. For those looking to buy a home with a fixed rate mortgage or renew a fixed rate mortgage, the most immediate BoC announcement won’t have much effect on them, but the overall economic story could affect them a few years down the line.  

What should I do in response to a BoC rate announcement?

It may be tempting to react immediately to whatever the most recent Bank of Canada interest rate announcement is, but resist the urge to act without thinking. “I always tell customers to be aware of the rate, but more importantly pay attention to the actual dollar amount they’ll pay. Yeah these rate fluctuations, they’re always going to be there. Instead, look at the amount you have to pay at the end of the month,” says Terry Batth, a Mortgage Broker at Bayfield Mortgage. “A lot of buyers are like, ‘I want the best rate; I want the best rate,’ but the ‘best rate’ is not always the best outcome for them. There’s so much noise out there, but everyone’s financial situation is different from each other.” Therefore, get in touch with a mortgage broker who can help explain what has happened and if it means anything for you. If you currently hold a variable rate mortgage, as mentioned, you will see an impact on your interest payments. Let your mortgage broker know you hold a variable rate mortgage so they can help guide you through the next steps. For fixed rate mortgage holders, you have less to worry about in the immediate future, unless you are coming up on a renewal or are considering a switch to a variable rate mortgage. If you are considering buying a home after a BoC rate announcement, remember that it will matter most to you if you go for a variable rate mortgage – but you will still have to qualify in the first place. BoC rate announcements don’t directly change the qualification criteria lenders use. You still have to show sufficient income, savings, employment records and other supporting documentation.

Written by: Buffini & Co Overwhelmed by too much stuff? You're not alone - most Canadians feel the same.

• 75% feel more stressed with a cluttered home.
• A third of us feel overwhelmed by the need to clean.
• 16 minutes per day looking for lost stuff.

Clear Space, Clear Mind

Reduce stress and chaos with these tips to bring more calm into your life.

• Commit to weekly decluttering, even if it's just a single drawer or closet.
• Start by tossing easy, obvious items (e.g., mystery cords, old takeout menus, expired products, orphan storage lids).
• Take photos of sentimental items you don't have room for, then sell, donate or toss.
• Call a local nonprofit (such as The Salvation Army or Furniture Bank) to come pick up items for donation.
• Be honest with yourself. Does an item still fit into your lifestyle? Or do you feel "obligated" to keep it?

Don't Forget to Do a Digital Detox Put on a favourite show or music and then...

• Clean out your inbox: set a timer for 15 minutes.
• Unsubscribe from newsletters, promotions, etc.
• Delete apps you don't use.

Written by: Zak Khan of REW The policy has implications for agents, Homeseekers and the market as a whole. With the Canadian Federal Election set for 28 April 2025, we’re examining the major parties’ housing announcements. Each party has their own plans for what they would do in the housing realm if elected, so keep an eye out for our articles breaking down their announcements on The Guide. Prime Minister Mark Carney announced on 20 March 2025 that the Government of Canada will no longer charge the goods and services tax (GST) on purchases of newly built homes less than $1 million for first-time buyers. This promise can only be put into practice after the next federal election if the Liberal party is elected to govern. The elimination of the GST will potentially lead to savings of up to $50,000 on the purchase of a new home. In BC, the current median home price currently hovers near $1 million, and in Greater Vancouver it is over $1 million. It is possible to find newly built condos for less than $1 million in Greater Vancouver, but far more difficult to find new townhomes below this threshold, while there are likely no new detached homes available below $1 million in the Metro Vancouver area. Real estate advisor Manraj Dosanjh at Dexter Realty, who specializes in new construction homes, thinks that, “This is a great step toward making ownership more affordable for those looking to get their foot in the market, as the 5% GST is seen as a financial barrier for would-be buyers of new construction homes.” This move would make it more affordable for first-time buyers to enter the housing market, but it may also drive up demand and therefore prices. Similarly, it may spur construction if demand increases, but it may also lead to a loss of tax revenue, causing a cutback in services or infrastructure spending. But Dosanjh also says that the policy could go further: “However, I believe that in order for the government to spark real activity in the new home market and increase the supply of much-needed housing, the elimination of the GST should be extended to all purchasers, including investors.” According to Dosanjh, pre-sale condos require buyers to make a purchase on a home that is set to complete two to five years later. Because of this dynamic, Dosanjh says, “it's mom-and-pop investors who are most likely to initially purchase pre-sales, making them an integral part of the puzzle in helping the developer meet their financing requirements to begin construction. This is especially crucial in the country's fastest-growing metros, where new housing starts are plummeting.”

Carney says the Federal Government will get back into building homes.

Carney further clarified his housing policies 31 March 2025. This included pledging to have the Federal Government directly involved in building homes via the Build Canada Homes (BCH) Federal entity. This entity would build affordable homes, including on public land, stimulate the new homes industry and provide financing to home builders of affordable housing, according to the plan. Canada’s Federal Government once had a similar program that was cut in 1993. It began after World War II in response to a housing shortage and was called the Wartime Housing Corporation, which became the Canada Mortgage and Housing Corporation (CMHC). BCH would act as a developer doing the land acquisition, management and planning of affordable homes, but private builders would do the actual construction as part of partnerships. All Federal affordable housing initiatives would fall under the BCH, transferring the Affordable Housing Fund and Federal Lands Initiative to its control. Carney says that using this approach would prompt demand for Canada’s building materials and construction industries. The Liberal housing plan also pledges to reintroduce a rental building tax incentive originally enacted in the 1970s. That was called the Multiple Unit Rental Building incentive, and lasted for seven years. It prompted the building of almost 200,000 rental units, but saw criticism because it did not require a minimum number of affordable units and claims that it acted as a tax shelter for investors. The Liberal Leader also says he aims to speed up construction by making public municipalities' progress in meeting their Housing Accelerator Fund commitments. He plans to streamline inspections and regulations and simplify the building code. As a result of these pledges, Carney claims that he will cut red tape and development hurdles to enable the construction of nearly 500,000 homes per year. If you’re considering purchasing a newly built home after this announcement, remember that the policy still has yet to be implemented. In the meantime, you can speak to a real estate agent and mortgage advisor for more guidance.

Written by: Erin Best of REW More US residents are considering moving north, but what does that mean for BC real estate? Effective January 2023, the federal government introduced the Prohibition on the Purchase of Residential Property by Non-Canadians Act. The Act was meant to ban foreign investors from buying non-recreational residential property in Canada, in an attempt to keep Canadian housing affordable for Canadians until January 2025. The Act was later extended for an additional two years to 2027.

What does "non-Canadian" really mean under Canada's foreign buyer ban?

Let’s break it down: when the Prohibition on the Purchase of Residential Property by Non-Canadians Act was passed on June 23rd, 2022, as part of Bill C-19, it put restrictions on who can buy residential real estate in Canada. But what exactly does "non-Canadian" mean under this law? In real estate terms, a non-Canadian is anyone who isn’t a Canadian citizen, a permanent resident or registered under the Indian Act. That means:

• Individuals: If you’re a citizen of another country and don’t have permanent resident status in Canada, you’re considered a non-Canadian.
• Businesses: If a company is incorporated outside of Canada and doesn’t have a permanent establishment here, it’s also considered non-Canadian.

While this law was designed to curb foreign investment in Canadian housing, exemptions exist, including for American buyers, which is why we’re seeing an influx of US buyers purchasing in areas where the ban doesn’t apply. Exemptions outlined in the Act do, in specific circumstances, allow non-Canadians purchase residential property, such as:

• Temporary residents studying in Canada: Must be enrolled in a designated institution, have filed taxes for five years, been in Canada for 244 days each year for five years, and purchase a property under $500,000.
• Temporary residents working in Canada: Must have a valid work permit with at least 183 days remaining, and not have purchased property while the ban was in effect.
• Refugees and protected persons: Can buy property. Accredited foreign diplomats: With the appropriate diplomatic status.
• Spouses/common-law partners of Canadians: Can buy property together. Indigenous rights: The ban does not apply if it conflicts with Indigenous rights under Section 35 of the Constitution.
• Properties outside major urban areas: Properties located outside Census Metropolitan Areas (CMA) or Census Agglomerations (CA) are exempt.

The Act also has some additional clarifications:

• The Act defines residential property as buildings with up to three dwelling units, including semi-detached houses and condominium units.
• The prohibition does not apply to properties located outside CMAs and CAs. As of March 27th, 2023, the prohibition does not apply to vacant land.

Because non-Canadian’s can buy properties outside of major urban areas (or CMA/CA’s) BC real estate agents report helping multiple American buyers purchase property in the first quarter of 2025. The political climate and rising living costs from tariffs are prompting many to leave the US. They’re attracted to Canada's seemingly stable government, favourable exchange rate, lifestyle opportunities and more predictable economy. Sotheby’s International Canada real estate agent, Rachel Manley, says that she and her partner Janai York have, “had four sets of US buyers come to view property on the Sunshine Coast already this year.” And that, “many agents have observed a rise in inquiries and transactions involving US buyers as their dollar seems to go much further here and also their political stance seems to be a factor.” Rachel goes on to explain: “The Sunshine Coast is exempt from the foreign buyers ban making it a fantastic option for those getting away from the US. We help to ensure they understand the legal, tax and financial implications of cross-border transactions.” Because the process can get complex, Rachel makes sure to walk through the process with her clients. She says, “This includes: connecting them with trusted professionals – lawyers, accountants and mortgage brokers – familiar with international purchases, providing insight into areas that match their needs, whether they are looking for a vacation home or permanent relocation and educating them on BC property regulations, including foreign buyer restrictions, financing options and residency considerations and offering zoom calls and virtual property tours to accommodate out-of-country buyers navigating the process remotely.” With increasing numbers of American buyers purchasing property in British Columbia – particularly in areas outside of Census Metropolitan Areas (CMAs) exempt from the Prohibition on the Purchase of Residential Property by Non-Canadians Act – there are several key real estate implications for local markets, affordability, development and policy considerations.

Rising demand in secondary markets.

This shift could potentially lead to increased competition for properties in regions like Whistler, Tofino, Revelstoke, the Osoyoos and key areas on Vancouver Island, because many of these areas fall outside the CMA definition. Basic supply and demand principles means more demand on properties leads to higher property values and increased competition in smaller, previously affordable markets. Real estate agents and developers will need to shift focus to these areas to meet demand, otherwise, we may see an inventory shortage for local buyers – something we are all too well familiar with in metro Vancouver.

Pressure on infrastructure and local development.

As smaller markets see increased population growth and investment, there’s likely to be more strain on local infrastructure, services and zoning regulations. These areas may not have the same development capacity as larger CMAs to handle population surges. Local governments may need to adjust zoning, expand utilities and enhance transportation networks, if we assume a large wave of US immigrants ends up moving to Canada.

Potential policy adjustments and expansion of the ban.

With American buyers finding ways around the foreign buyers ban, policymakers may re-evaluate the Act’s effectiveness. The government could consider expanding the ban’s geographical coverage or introducing new taxes on non-resident purchases. Possible policy changes or tax measures targeting non-Canadian buyers outside CMAs risk increasing scrutiny on real estate transactions in rural areas and creating more public debate on foreign ownership and housing accessibility generally. While some may worry about Americans purchasing property in BC, frankly, it’s too soon to tell. But this trend isn't necessarily a totally bad thing. For real estate agents in non-CMA markets, it opens up new opportunities to work with motivated buyers looking for stability or lifestyle upgrades. Increased demand can bring economic benefits to smaller communities, supporting local businesses and driving real estate activity in areas that may have previously seen slower growth. BC real estate agents are well-positioned to help these buyers navigate the market, ensuring fair transactions and fostering long-term client relationships. As cross-border interest in BC real estate grows, agents who adapt to these trends will find new ways to thrive in uncertainty.

Written by: Buffini & Co Blast Past Financial Headwinds! For many, spring is tax season - a perfect time to evaluate your overall financial health. Use the opportunity to refine your budget and set yourself up for financial success for the rest of the year. What will spark momentum and power you forward? START HERE:

• Establish short and long-term goals.
• Reduce unnecessary expenses.
• Create a budget.
• Explore other income streams.
• Consult with a qualified financial professional.

92% of Canadians review their financial plan at least once a year. Your Financial Launch Pad Build a long-term financial strategy with steps you can take today: 3. Assess - Track all monthly expenses, including scheduled payments (e.g., mortgage) and miscellaneous expenses. 2. Budget - Check out online budgeting tools like YNAB (ynab.com), Goodbudget (goodbudget.com) or Honeydue (honeydue.com). 1.  Commit - Make a promise to yourself and your family - you can do this!

• Reduce Spending - Think about what you can eliminate from your budget, even if only temporarily (e.g., streaming platform services, daily coffee runs, takeout meals, etc.).
• Play the Long Game - Time goes by fast! Invest in your future by contributing to a retirement account.
• Job Options - Explore gig work and temporary second jobs. Or it may finally be the right time to make the leap to a new career!

Written by: Dr. Sherry Cooper & Associates Bank of Canada Cuts Rates by 25 BPS on Tariff Concerns The Bank of Canada (BoC) reduced the overnight rate by 25 basis points this morning, bringing the policy rate down to 2.75%, within the neutral range of 2.25%—2.75%. Tariff tremors have already led to a decline in consumer confidence and spending, a weakening labour market, and a decline in business investment. Compound that with falling population growth, and you see why the Governing Council took the overnight rate down again even though they state that monetary policy cannot offset the impacts of a trade war. Trade wars lead to higher prices and slower growth. The rise in prices causes consumers to tighten their belts, concerned about the impact of tariffs on their income and investments. Today, there is a 25% tariff on steel and aluminum exports to the US. This impacts Canada the most as it supplies roughly 80% of US aluminum demand. The EU introduced retaliatory tariffs on US goods in response. Canada added to its retaliation. Recent data suggest the US economy is slowing. Monetary policy remains restrictive as the real overnight rate (2.75% minus the headline inflation rate) is 85 bps, up from the historical average of 60 bps. Five-year Government of Canada bond yields increased on the news to 2.65% compared to 4.05% in the US. The Federal Reserve is not expected to cut rates when it meets again this month. Despite relatively strong GDP growth in Canada in the second half of last year, home sales and hiring began to slow in late January due to tariff threats, and more tariffs are yet to come. On March 20, China is expected to impose 100% retaliatory tariffs on Canadian canola oil, while pork and seafood will face a 25% levy. The Chinese tariffs are a push-back against Canada for imposing a 100% levy on electric cars from China and  25% on steel and aluminum. On April 2, the US announced it will impose reciprocal tariffs on nations that have levied tariffs on US goods. President Trump has also said he is considering imposing retaliatory tariffs on Canadian dairy and lumber. “We’re now facing a new crisis. The economic impact could be severe depending on the extent and duration of new US tariffs,” Macklem said in his prepared remarks. Macklem called the uncertainty of the tariff dispute “pervasive” and said that it was “already causing harm.” Officials said the “continuously changing” US tariff threat was hitting consumers’ spending intentions and limiting businesses’ plans to hire and invest. At the same time, Macklem said the bank “will proceed carefully with any further changes” to borrowing costs, and officials would “need to assess both the upward pressures on inflation from higher costs and the downward pressures from weaker demand.” Bottom Line These are uncertain times. The US is determined to impose worldwide tariffs, disproportionately hitting Canada, Mexico, and China, the US’s top trading partners. This is a misguided neo-Mercantilist policy. Mercantilism assumes that the global economic pie is fixed, so if one country prospers, another must fail. This idea of a zero-sum game was debunked in the 18th century by Adam Smith and others who showed that if countries have a competitive advantage in various products and services, all are better off by producing and trading those products with the rest of the world. It is not a zero-sum game. The economic pie grows with trade. This was the idea behind globalization and the USMCA free trade agreement. Given Canada’s vulnerability to tariffs, the economy will suffer more than the US, which has a relatively closed economy (where exports are a small proportion of GDP). Prices will rise depending on the duration and size of the coming tariffs, but mitigating the inflation will be the weakness in economic activity. Stagflation, a buzz-word in the 1970s, is back in the lexicon. We expect the BoC to continue cutting the policy rate in 25-bps increments until it reaches 2.25% this June, triggering a rebound in home sales. Layoffs and spending cuts will dampen sentiment, but lower interest rates will bring buyers off the sidelines.

Written by: Dr. Sherry Cooper & Associates Trump Did It - Trade War Starts Today Trump has imposed tariffs of 25% on goods coming from Mexico and Canada, 10% on Canadian energy, and an additional  10% on goods from China. He justified these actions by claiming they would force Mexico and Canada to address issues related to undocumented migration and drug trafficking. However, while precursor chemicals for fentanyl come from China and undocumented migrants enter through the southern border with Mexico, Canada accounts for only about 1% of both issues. The Wall Street Journal, typically considered a conservative publication, criticized Trump, labelling this as the “dumbest trade war in history.” The Journal stated, “Mr. Trump sometimes sounds as if the US shouldn’t import anything at all, that America can be a perfectly closed economy making everything at home. This is called autarky, and it isn’t the world we live in or one that we should want to live in, as Mr. Trump may soon find out.” This misguided tariff policy will cause untold damage to the global economy, including the US. Americans will suffer the impact of higher prices and shortages of key products imported from Canada and Mexico. The various North American free trade agreements aimed to improve manufacturing efficiencies and meld the three economies to maximize productivity and the free flow of essential inputs into production. Canada is the number one supplier of steel and aluminum and there are no readily available substitutes for these crucial inputs. A plethora of products and construction activity use steel and aluminum. Aluminum is produced in Quebec where hydroelectricity is plentiful and cheap. US farmers depend on Canadian potash and auto parts, and Canada is the number one exporter of oil and gas to the US. Consider the US auto industry, which operates as a North American entity due to the highly integrated supply chains across the three countries. In 2024, Canada supplied nearly 13% of US auto parts imports, while Mexico accounted for almost 42%. Industry experts note that a vehicle produced on the continent typically crosses borders multiple times as companies source components and add value most cost-effectively. This integration benefits everyone involved. According to the Office of the US Trade Representative, the industry contributed more than $809 billion to the US economy in 2023, representing about 11.2% of total US manufacturing output and supporting 9.7 million direct and indirect US jobs. In 2022, the US exported $75.4 billion in vehicles and parts to Canada and Mexico. According to the American Automotive Policy Council, this figure rose 14% in 2023, reaching $86.2 billion. Without this trade, American car makers would struggle to compete. Regional integration has become an industry-wide manufacturing strategy in Japan, Korea, and Europe. It leverages high-skilled and low-cost labour markets to source components, software, and assembly. As a result, US industrial capacity in automobiles has grown alongside an increase in imported motor vehicles, engines, and parts. From 1995 to 2019, imports of these items rose by 169%, while US industrial capacity in the same categories increased by 71%. Thousands of well-paying auto jobs in states like Texas, Ohio, Illinois, and Michigan owe their competitiveness to this ecosystem, which relies heavily on suppliers in Mexico and Canada. Tariffs will also cause mayhem in the cross-border trade of farm goods. In fiscal 2024, Mexican food exports comprised about 23% of US agricultural imports, while Canada supplied some 20%. Many top US growers have moved to Mexico because limits on legal immigration have made it hard to find workers in the US. Mexico now supplies 90% of avocados sold in the US. Yesterday, the President’s tariff announcement led to an immediate sell-off in stock markets worldwide. Bonds, seen as a safer haven, rallied sharply, taking longer-term interest rates down sharply in anticipation of a meaningful slowdown in economic activity. The Canadian dollar sold off sharply, though it clawed back some of its losses overnight. WTI oil prices dropped 2% yesterday and continued to decline today. Bottom Line This is a lose-lose situation and President Trump underestimates the negative fallout of his actions at home and abroad. Retaliation will be swift. Americans will balk at the disruption of supply chains (think waiting for months for a new car) and the increase in the price of many products. Legendary investor, Warren Buffet, called the tariffs an “act of war.” Before the tariffs were imposed, we expected roughly 2% growth this year. Assuming the tariffs remain in place for a year, the Canadian economy will plunge into recession. We will likely see a few quarters of negative growth before growth gradually resumes. Despite the inflation risk, the Bank of Canada will respond aggressively to minimize the meltdown in labour markets and the economy in general. When the Governing Council meets again on March 12, we expect another 25 bps cut in the overnight policy rate, bringing it down to 2.75%. Over the next year, we expect the Bank to continue to ease credit conditions, and a 2.0% overnight rate is likely. The Canadian 5-year yield, a bellwether for setting fixed mortgage rates, has fallen to 2.51%, its lowest level in nearly three years. Lower interest rates are favorable for housing markets, although the inevitable rise in unemployment and drop in spending will mitigate this effect.

Written by: Buffini & Co Each year only 1 out of 10 people complete their New Year's resolutions. RESOLUTION: A broad statement of intent or desire to change something. GOAL: A written goal focuses effort and sustains you through challenges or setbacks. Make This Year Different. Crush Your Goals! Kaizen: Is a Japanese business philosophy that encourages making small, continuous changes that will lead to a big impact. Use its principles to reach your own business and personal goals. The Four Keys of Kaizen:

1. Identify one small specific area of your life you would like to change.
2. Take time to examine where your resources might be misdirected.
3. Focus on making small, incremental steps toward your goal.
4. Commit to a time each week to review progress, evaluate what's working, and what needs to adjust.

Written by: Dr. Sherry Cooper & Associates Stronger-Than-Expected Jobs Report in December Today’s Labour Force Survey for December was much stronger than expected, as many thought the Canada Post strike would have a larger impact. Employment rose by 90,900 net new jobs last month, and the employment rate—the proportion of the population aged 15 and older who are employed— increased by 0.2 percentage points to 60.8%. The jobless rate declined a tick to 6.7%. Employment gains in December were led by educational services (+17,000; +1.1%), transportation and warehousing (+17,000; +1.6%), finance, insurance, real estate, rental and leasing (+16,000; +1.1%), and health care and social assistance (+16,000; +0.5%). In December, employment increased in Alberta (+35,000; +1.4%), Ontario (+23,000; +0.3%), British Columbia (+14,000; +0.5%), Nova Scotia (+7,400; +1.4%), and Saskatchewan (+4,000; +0.7%), while there was a decline in Manitoba (-7,200; -1.0%). Employment changed little in the other provinces. Total hours worked rose 0.5% in December and were up 2.1% compared with 12 months earlier. Average hourly wages among employees were up 3.8% (+$1.32 to $35.77) on a year-over-year basis in December, following growth of 4.1% in November (not seasonally adjusted). Employment rose by 91,000 (+0.4%) in December, mostly in full-time work (+56,000; +0.3%). This follows an increase in November (+51,000) and marks the third employment gain in the past four months. The year 2024 ended with 413,000 (+2.0%) more people working in December compared with 12 months earlier. This year-over-year growth rate was comparable to the one observed in December 2023 (+2.1%) and to the average growth rate for December over the pre-COVID-19 pandemic period of 2017 to 2019 (+1.9%). Public sector employment rose by 40,000 (+0.9%) in December, the second consecutive monthly increase. In the 12 months to December, public sector employment rose by 156,000 (+3.7%), driven by gains in the public-sector components of educational services as well as health care and social assistance. Private sector employment was little changed in December (+27,000; +0.2%) and was up 191,000 (+1.4%) on a year-over-year basis. The number of self-employed people rose by 24,000 (+0.9%) in December, the first increase since February. This brought total gains in self-employment for the year to 64,000 (+2.4%). Wage inflation slowed markedly in November and December, providing welcome news for the Bank of Canada. While the strength of this report has led some to speculate the central bank will ease less aggressively, we agree that jumbo rate cuts are a thing of the past. However, monetary policy is still overly restrictive, especially if the Trump tariff threats come to fruition. We expect the BoC to take the overnight rate down from 3.25% today to 2.5% by mid-year in quarter-point increments. Bottom Line The Canadian Labour Force Survey is notoriously volatile. One robust report does not change the Bank of Canada’s easing plans to return interest rates to neutrality–the level at which monetary policy is neither contractionary nor expansionary. Today’s US employment report was also quite strong, reducing the unemployment rate to 4.1%. While the Fed is unlikely to cut rates when the FOMC meets again on January 29, the Bank of Canada has room to ease further. Canada’s economy is far more interest-sensitive than the US, and interest rates in Canada -though historically low compared to the US- are still overly restrictive.