Sep 01, 2023
By Jane Brown
The Canadian economy appeared to stall in the second quarter of this year, as investment in housing continued to fall, led by a drop in new construction.
The latest report from Statistics Canada says the economy contracted at an annualized rate of 0.2-percent in the second quarter.
The agency also revised its reading for growth in the first quarter to an annual pace of 2.6-percent, down from 3.1-percent.
Housing investment fell 2.1 per cent, new construction dropped 8.2 per cent and renovation spending fell 4.3 percent.
The report comes ahead of the Bank of Canada’s interest rate decision set for next week.
The premier of British Columbia says he’s sent a letter to the Bank of Canada governor asking him not to raise interest rates further.
David Eby is urging Tiff Macklem to consider the human impact of rate hikes.
“Statistics Canada is saying the biggest driver of inflation in our country right now is rising mortgage rates, rising mortgage costs, and to point out the reality we see on the ground in British Columbia, that the biggest increase in costs that many families face is housing,” Eby explained.
There have been ten interest rate hikes by the Bank of Canada over the past 17 months, most recently last month.