As the Bank of Canada continues to hike rates in order to curb inflation, housing prices in Canada could fall 15 per cent from its peak by the end of next year, a new report says.
The average price of a home in Canada peaked at just over $790,000 in February 2022, marking a 50 per cent increase over two years. But the report, published on Wednesday by Desjardins, says by December 2023, the average national home price could fall to around $675,000.
Since the Bank of Canada began to raise interest rates in order to combat inflation, home prices has steadily declined. Desjardins says that average price of a home in Canada fell 2.6 per cent month-to-month in March and 3.8 per cent in April.
But despite the expected drop, Desjardins notes that $675,000 is still nearly 30 per cent above what it was in December 2019, when the average price of a home was $530,000 in Canada. Jimmy Jean, chief economist and strategist for Desjardins, says he expects the decline in home prices to be “fairly manageable” before stabilizing, citing increasing levels in immigration and a continuous shortage of housing supply amid strong demand.
“Our expectation is for the housing market to cool to moderate, but we’re not expecting any collapse by any measure,” Jean told CTV News on Thursday.
For most homeowners who intend to keep living in their homes for decades to come, including those who jumped into the market near the peak, Jean says this housing correction will only be a small “blip.”
“Housing is an investment normally you make for the long-term,” Jean said. “Ultimately, you’re buying a product to raise a family, to live into. So, over the long term, things will stabilize and pick up again. So, it’s not a major concern from that perspective.”
But it’s a different story for real estate investors who were expecting huge gains from rising housing prices.
“If you rent out a property, sometimes, if you don’t collect enough in terms of rent to make up for the mortgage costs or the utility costs, those decisions were still justified by the idea that prices would keep appreciating,” he said. “Now it’s another story.”
The Bank of Canada is expected to raise rates again by another 50 basis points in July, and bank governor Tiff Macklem has indicated that interest rates may have to spike to 3.0 per cent.
But Desjardins economists believe Macklem won’t have to go all the way to 3.0 per cent and say 2.25 per cent will be enough to slow inflation.
“The Canadian economy is highly rate sensitive,” Jean said. “We think this moderation will be significant and will cause economic growth, and therefore inflation, to slow, and that will remove the necessity for Tiff Macklem and the Bank of Canada to hike all the way to three per cent.”
HOUSING CORRECTION TO BE MOST SEVERE IN MARITIMES
While a 15 per cent drop is what Desjardins forecasts nationally, some regions may experience even bigger corrections, particularly in parts of Canada that saw that steepest pandemic-era home price increases.
After years of population declines, the Maritime provinces saw an explosion in population growth from 2020 and onwards, as the advent of remote work enabled more Canadians from big cities to flock to the east coast, seeking larger and more affordable living spaces.
In turn, P.E.I., Nova Scotia and New Brunswick saw the highest housing price increases in the country. Compared to December 2019 levels, the average price of a home in these provinces rose 62 to 70 per cent in February 2022.
These provinces are also expected to see the largest corrections; Dejardins says housing prices could drop between 18 to 20 per cent.
The Prairies and Newfoundland and Labrador saw the smallest pandemic-era spikes in housing prices. These provinces rely heavily on oil, and crude prices took a nosedive in the early months of the pandemic. Home prices in these regions are only expected to fall between two to 10 per cent by December 2023, the Desjardins report says.
B.C.’s home prices are also expected to fall 15 per cent, closely mirroring the national average, while prices in Quebec will fall 12 per cent thanks to its “much greater housing affordability and less overvalued market,” the report states.
Ontario’s home prices are expected to decline 18 per cent, but these drops will vastly differ across regions. Much like the Maritimes, the communities within a few hours drive from Toronto saw home prices jump 70 per cent between December 2019 and February 2022 as many Canadians began to work from home. Desjardins says outside of the Greater Toronto Area, home prices could fall 20 per cent, with the biggest declines expected in Bancroft, Chatham Kent and Windsor-Essex.
With files from CTV National News Parliament Hill Correspondent Kevin Gallagher.
Indigenous conservation Canada’s way of the future, Guilbeault says
Tanya Ball began her career as a social worker for the Kaska Dene First Nation. Now she runs a land guardian program, working to monitor and protect a vast stretch of the band’s northern British Columbia wilderness.
But she’s still a social worker, in a way.
“Land guardians can help the land heal,” she said. “And the land can help the guardians heal.”
Ball is at the forefront of the new way Canada protects its remaining healthy rivers, lakes, forests, mountains and plains. Crown governments would once rope off an area deemed particularly scenic or good for outdoor recreation and call it a park.
“There’s no future when it comes to conservation where the federal government is involved (and) Indigenous people aren’t involved from the get-go,” said federal Environment Minister Steven Guilbeault. “This traditional model is a thing of the past.”
Conservation is now something Indigenous people lead instead of something done to them. Most protected areas in Canada are now being proposed by Indigenous groups, who aim to look after those lands themselves.
There are now about 80 protected areas in Canada monitored by the people to whom the lands originally belonged. Some are designated only by the local First Nation and some are part of the national parks system.
But more — many more — are on their way.
The most recent federal budget contains funding for at least another 27 Indigenous Protected and Conserved Areas. Ottawa just signed a memorandum of agreement with the Nunatsiavut government in Labrador to develop one with both parties involved from the start.
It’s the only way Canada is going to fulfil its international promise to protect 30 per cent of its land mass, said Sandra Schwartz of the Canadian Parks and Wilderness Society.
“Achieving those protection targets for Canada are realistic,” she said. “Many of those opportunities are on Indigenous land.”
Indigenous conservation comes from the historic cultural attachment to the land and the political desire for a land base, said Val Courtois of the Indigenous Leadership Initiative, who has been involved in the movement for years.
“The assertion of rights in Canada has always been about that relationship to place. This is just a new way of describing that responsibility.”
Indigenous Protected and Conserved Areas have been created under federal, provincial and band structures and vary widely in how they function and what they do. Some don’t meet international conservation area standards and won’t count toward Canada’s 30 per cent goal.
But they all involve some level of Indigenous co-management, they all involve land-use planning and they all involve guardians — local First Nations people charged and trained with stewarding the land.
Ball said her staff of eight takes water samples, makes maps, monitors hunting, delineates archeological sites, keeps track of visitor impacts, watches animal movements, assists conservation officers and runs research projects.
“They’re very busy,” she said.
One thing they don’t do is put up fences. Indigenous Protected Areas aren’t meant to keep anyone out, Courtois said.
“I would fall off my chair if I heard of an Indigenous group that is saying ‘let’s exclude everybody,’” she said. “There may be small portions that are particularly sacred, but the idea of exclusion of people is an antithesis of how we understand these places.”
Decisions on local development are made locally, she said.
Tara Shea of the Mining Association of Canada said her group generally supports Indigenous protection — as long as the process is transparent and potential mineral tenures are considered in advance.
“We strongly believe mineral development and biodiversity conservation can go hand-in-hand.”
There are challenges. While the federal government has set aside more than $300 million since 2018 for Indigenous conservation, Guilbeault acknowledges a source of permanent funding for such programs is still being sought.
“We don’t do permanent programs. The philanthropic world has played a huge role in conservation and will continue to. We welcome their involvement.”
Ottawa, the Northwest Territories, area First Nations and the U.S.-based Pew Charitable Trusts are currently negotiating a way for Pew money to finance the guardian program at the Edehzhie National Park and Indigenous Protected Area.
Another obstacle is the varying degrees of support from provincial governments, which control most of Canada’s Crown land.
“The level of enthusiasm varies,” said Guilbeault, who declined specifics. “Some provincial governments don’t believe in the government-to-government relationship.”
“It’s tough for provinces,” she said. “They’re used to being in the driver’s seat.”
Ball believes Indigenous conservation is important for the whole country as a crucial component of reconciliation. She sees what happens if people from her First Nation go out on the land they once again help manage.
“Sometimes people want to come out just for the day. I just see a difference in people by the end of the day. Their behaviour changes, their mood has lifted,” Ball said.
“I think that’ll really help with social issues, too.”
This report by The Canadian Press was first published June 25, 2022.
— Follow Bob Weber on Twitter at @row1960
Bob Weber, The Canadian Press
Russia is 'weaponizing' food, Joly tells Commonwealth partners – CBC News
Commonwealth leaders, meeting for the first time in four years, discussed food security and the risk of starvation as Canada’s foreign affairs minister sought to lay the blame for the impending crisis at the feet of Russia.
“What is clear to us is that Russia is weaponizing food, and putting a toll on many countries around the world, and putting 50 million lives at risk,” Mélanie Joly told reporters late Friday, while giving a recap of the first day of the Commonwealth meeting in Kigali, Rwanda.
Ukraine is the world’s fourth-largest grain exporter and reportedly has more 30 million tonnes of grain in storage, waiting for export. Farmers are said to be building temporary silos and are worried because the summer harvest is only weeks away.
The country’s Black Sea ports of Odesa, Pivdennyi, and Mykolaiv and Chornomorsk serve as major terminals — shipping about 4.5 million tonnes of grain per month, but a Russian naval blockade is preventing movement.
A recent report from the Washington-based Center for Strategic and International Studies (CSIS) concluded that Russia is taking advantage of transportation bottlenecks to attack Ukraine’s food storage facilities.
Russian forces have attacked grain silos across the country and stolen an estimated 400,000 to 500,000 tonnes of grain from occupied regions, according to Ukraine’s Defence Ministry.
The CSIS report, posted online on June 15, noted “Russia destroyed one of Europe’s largest food storage facilities in Brovary, roughly 19 kilometres northeast of Ukraine’s capital of Kyiv.”
The subject of the Russian blockade of Ukraine grain exports will also be at the centre of the G7 leaders meeting, beginning Sunday in Germany.
Russian President Vladimir Putin last week delivered a scathing critique of the crisis, blaming the U.S. and not the Russian military actions in Ukraine for endangering food security, and rising inflation and fuel prices.
He reinforced the message in a phone call last week with South African President Cyril Ramaphosa, who was one of the Commonwealth leaders to skip this week’s meeting.
Africa is heavily reliant on Ukrainian and — to a lesser extent — Russian grain.
For those leaders who did show up in Rwanda, Joly said Canada has been clear in assigning blame for the crisis.
Sanctions not to blame, Joly says
“This is not the fault of the Western sanctions,” she said. “This is really Putin’s war of choice that is affecting food security around the world.”
Ten members of the Commonwealth abstained from condemning Moscow’s invasion of Ukraine in a United Nations resolution last spring.
Joly said she believes Canada made “headway” at the conference in convincing some of those nations to stand more firmly with Ukraine, but she wasn’t specific.
In a policy session held before the meeting of Commonwealth leaders, there was a call for African countries to be more self-sufficient in food supplies to offset imports.
Agnes Kalibata, president of the Alliance for a Green Revolution in Africa (AGRA), told the conference said that the agriculture sector in developing countries of the Commonwealth is “heavily underinvested.” She called for adequate funding to boost “the sector productivity, strengthen its resilience and deal with climate change, as well as create jobs, according to local media reports.
Immigration Minister: Applicants can soon expect normal service standards – Canada Immigration News
Canada’s Immigration Minister Sean Fraser believes meaningful steps are being taken to get the immigration system back on track.
Fraser acknowledged ongoing application processing and client experience challenges when he sat down with CIC News for an exclusive interview in Toronto earlier this week.
Minister expects things to return to normal by the end of 2022
“The COVID-19 pandemic hampered our immigration system in two main ways. It shut down a lot of our offices around the world…we lost a lot of our horsepower as a department.”
The second way, he explained, was Immigration, Refugees and Citizenship Canada (IRCC) needed to pivot to transitioning those in Canada to permanent residence since travel restrictions limited the ability of those abroad to enter the country. This was happening as new applications continued to flow in, leading to an accumulation of inventory. Then in August 2021, Canada made the commitment to resettle 40,000 Afghan refugees following the Taliban reclaiming power of Afghanistan and since February 2022, Canada has been looking to assist those impacted by Russia’s invasion of Ukraine.
“The good news is I see light at the end of the tunnel…we’re on track right now to restore our pre-pandemic service standard by the end of this calendar year for virtually every line of business.”
Minister Fraser added the caveat that the service standard for Canadian citizenship applications may continue to lag a bit due to the inventory growing significantly at the start of the pandemic when in-person citizenship ceremonies were not an option.
Fraser: Three solutions to improve client experience and address backlogs
The minister believes the three solutions to improve the immigration system are “resources, policy, and tech.”
“On the resources side, we’ve added 500 more staff.” He also pointed out the additional $85 million and another $385 million allocated in recent federal budget announcements that will go towards improving application processing.
Meanwhile, Fraser believes Canada will need even higher levels of immigration to meet growing demand to gain Canadian permanent residence.
“The number one policy is our Immigration Levels Plan. We’re not going to chip away at the number of cases in the inventory if we don’t expand the numbers.”
In February, Fraser announced Canada would welcome over 430,000 immigrants annually beginning this year, by far the highest levels in Canadian history. He is set to announce the Immigration Levels Plan 2023-2025 by November 1st of this year, which may result in another increase in Canada’s targets.
With respect to the third solution, technology, the minister said that “digital platform modernization is going to greatly increase the reliability and pace of our system.”
“These measures are starting to have an impact…a couple of weeks ago we passed 200,000 permanent residents landed in Canada.” The minister noted this has broken the previous record by 1.5 months.
“Work permits have almost 250% increased compared to last year.”
IRCC’s backlog has surged to 2.4 million persons during the pandemic and the department has struggled to achieve its own targets on the length of time it aims to process applications. Since the start of this year, it has made major announcements and changes as it seeks to reduce the backlog, processing times, and give its clients more certainty. In late January, minister Fraser held a press conference summarizing IRCC’s processing goals including the steps it was taking to increase staff capacity and modernize its processes and technology.
One of the benefits has been the reduction in the Express Entry backlog. The minister told CIC News that all-program Express Entry draws are tentatively set to resume on July 6. In addition, IRCC aims to get back to its pre-pandemic service standard of processing Express Entry applications within six months beginning in July.
Another benefit is that IRCC has introduced and is in the process of introducing more case trackers to allow applicants to review the status of their files. The minister says 17 lines of business will have case trackers by the end of this summer allowing applicants to digitally monitor their status.
While challenges remain, the minister expressed great optimism to CIC News.
“My sense is by the end of this calendar year, new applications coming in will have the kind of certainty that we’ll be able to meet our service standard and people will be dealing with 60 days or 6 months or 12 months, not an undetermined period of time.”
Special interview series with Minister Fraser
CIC News sat down with the minister on June 21, 2022 to discuss the future of Canadian immigration.
Over the coming weeks, CIC News is releasing a special series of articles elaborating on the interview with Minister Fraser on topics including:
Minister Fraser was in Toronto to speak at Collision, one of the world’s largest technology conferences.
© CIC News All Rights Reserved. Visit CanadaVisa.com to discover your Canadian immigration options.
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