Canada’s inflation rate slowed by more than expected last month after a sales tax break rolled out of yearly comparisons.

                 A shopper walks through St. Lawrence Market in Toronto.

By Nojoud Al Mallees

(Bloomberg) — Canada’s inflation rate slowed by more than expected last month after a sales tax break rolled out of yearly comparisons.

Headline inflation fell to 1.8% in February from 2.3% in January, Statistics Canada reported on Monday. That’s lower than the 1.9% expected by economists surveyed by Bloomberg.

A temporary sales tax break introduced by former prime minister Justin Trudeau on a range of goods, including restaurant meals and children’s toys, expired in the middle of February last year.

While the tax holiday initially drove yearly headline inflation higher because of base effects, it’s now reversing and causing a deceleration that will likely affect March inflation data as well.

Core measures of inflation also eased by more than expected in February. The consumer price index excluding food and energy was up 2%, while the central bank’s median and trim measures of inflation both fell to 2.3%.

Canada bonds rallied across the curve, with the two-year yield down 6.3 basis points to 2.725% as of 9:14 a.m. in Ottawa.

Shelter prices continued to decelerate last month, and were up just 1.5% from a year ago, the slowest pace in five years amid weak housing resales and smaller rent price increases.

Prices for food — which has been a major sore spot for Canadian consumers — also rose at a slower rate. Yearly inflation on food purchased from stores was 4.1% in February from 4.8% the previous month. The deceleration was led by weaker price growth for frozen or fresh beef.

Still, grocery prices are up a cumulative 30.1% over the past five years.

Meanwhile, a more modest year-over-year deceleration in gasoline prices last month moderated the slowdown in headline inflation, with prices at the pump down 14.2% compared to 16.7% in January.

Gasoline prices were up 3.6% on a monthly basis, largely driven by an increase in oil prices ahead of the Middle East conflict and oil supply disruptions in some producer countries, Statcan said.

Andrew DiCapua, an economist at the Canadian Chamber of Commerce, said higher oil prices from the conflict in Iran are likely to show up in next month’s data too.

“For the Bank of Canada, the signals remain mixed with jobs data and inflation pulling them in different directions. That uncertainty for now will likely keep the Bank on hold at this week’s meeting as it waits for a clearer picture,” DiCapua said in an email.

On Friday, Statistics Canada reported the country lost 83,900 jobs in February, the biggest decline in more than four years.

Policymakers are widely expected to keep the benchmark interest rate unchanged at 2.25% on Wednesday.

–With assistance from Mario Baker Ramirez.

©2026 Bloomberg L.P.

This article was reposted from the Canadian Mortgage Trends website.

A cooling housing market has been good news for those looking to buy their first home, but for homeowners looking to move up the property ladder, the slowdown is more of a mixed blessing.

By Craig Wong, re posted from the Canadian Mortgage Trends website

If you need to sell a home and buy another, the easing in the market adds complexity to your decision.

Davelle Morrison, a broker at Bosley Real Estate Ltd. Brokerage, says it depends on your local market when deciding whether to sell your home first or find your next home and then put your current place up for sale.

“It is important to recognize what kind of market that you’re in, in terms of whether you buy first or sell first,” she said.

“Right now, we’re in that kind of a market where it really does make sense to sell first.”

If you’re looking for a house to buy, a slower market means there will be less of a chance that you’ll find yourself in a bidding war for your new home. That’s good news for potential homebuyers who faced a red-hot market just a few years ago.

But most homeowners need the proceeds from the sale of their current home to make the down payment on the new one and the easing in the market also means it might be harder or take longer than expected to sell your existing property.

That means if you have an offer accepted on a new place without a deal to sell your current home, you’ll have to find a way to bridge the transition financially or delay the closing of the deal until you sell if you don’t want to lose out on the new place.

But if you sell first and close on the sale before you find a home you love to move to, you could find yourself scrambling to find somewhere to lay your head until you find somewhere new to call home.

Morrison said it is important to honest with yourself when it comes to the process of finding a new place.

“If you’re the kind of person who’s extremely, extremely picky and you’re looking for something that’s really specific that doesn’t come out on the market very often, you might need to consider buying first because you might not find what you need if you sell first,” she said.

If that’s the case, Morrison said it is important to take steps to protect yourself.

If you find your dream home before you have a signed deal on your own home and still want to make an offer, she says you’ll want to consider making your offer conditional on the sale of your home.

Anne Alkok, the broker of record at Wahi Realty Inc., said in a hot market a seller might be unwilling to accept such a restriction, but a Realtor can help you understand the current market in your area.

“You do have to be familiar with the market conditions,” she said.

Bridge financing might also be an option, but you’ll have to check with your lender to see if you qualify in addition to qualifying for your mortgage.

A short-term loan to buy your new home before the old one sells could be an option, but it will add costs as interest rates are typically higher than in conventional lending.

Alkok said if your budget is tight and your next purchase depends heavily on what you net from the sale, selling first will give you a clear idea of how much you’ll be able to afford when making your own offer.

Whereas, she says, if you are in a stronger financial position, then you might have more flexibility. “But carrying properties even temporarily does cost money. So it does have to be planned carefully,” she said.

Alkok said there isn’t one choice that works for everyone and it is important to know what you are comfortable with.

“Some people want the certainty. They want to know exactly what their home sells for before they shop. Other people are comfortable making a move first because they’re confident that their home will sell and that they have the financial flexibility to manage the timing.”

The management of one crisis often creates another. That was the case during the COVID-19 pandemic when central banks cut interests rates to almost zero in the hopes that they could keep a generational health crisis from becoming a spiralling economic crisis. Between late March of 2020 and February of 2022, the Bank of Canada’s key interest rate was 0.25 per cent. The prime lending rate over that same period, according to ICICI Bank, was 2.45 per cent. Those cuts sparked a housing and mortgage renewal boom. Buyers chased higher priced homes thanks to better monthly affordability, and many existing borrowers refinanced. Now those five-year term mortgages are up for renewal, and while rates have come down somewhat from their mid-2023 highs, those borrowers are looking at prime rates almost double their COVID-era lows. The question, then, is how mortgage holders can keep up.

Christine Tan is a Portfolio Manager with SLGI Asset Management Inc. She explained what we’ve seen so far among Canadians who entered into five-year mortgage terms in late 2020 and have already gone through the process of renewing at a higher rate. She outlined some of the macro forces now at work and explained how tightening consumer balance sheets could, or could not, impact Canadian markets. She stressed that as clients face higher carrying costs for their homes, the response from advisors may be to prioritize debt servicing over long-term savings, at least for now. She noted, too, that panic over rising delinquency rates may be overstated.

“If you look back to 2017 or 2019 before COVID, the delinquency rate for mortgages in Toronto was about 0.1 per cent. CMHC numbers project that by the end of 2026 Toronto could go as high as 0.4 per cent. That sounds high but if you look over the longer-term it’s actually returning to a longer-term normal,” Tan says. “It depends on how you frame things. You can frame it as increasing fivefold since 2022 and it sounds scary, but looking at the longer-term it looks more okay.”

While Tan acknowledges that this rise in delinquency rates is happening across the country and could impact as many as one million households, the broader context would point to this shift as very much something the Canadian economy can weather. Even though many markets are seeing home prices decline from their pandemic-era highs while debt servicing costs rise, this is all within bearable levels.

Drilling down somewhat, Tan sees this trend as another sign of the ‘K-shaped economy’ as well. She notes that lower income and first-time homebuyers are now facing harder to manage debt servicing costs. The impact of US tariffs will also play a role as major manufacturing cities in Southern Ontario, for example, are facing difficult renewals along with job losses.

While delinquency and default rates offer a more extreme view of mortgage cost impacts, Tan also explains how broad sentiment around costs have shifted. She notes that Bank of Canada survey data has found negative consumer sentiment for years now. That was initially sparked by high inflation before debt servicing costs started to be more acutely felt. Those debt servicing costs are now compounding existing consumer challenges around inflation and job instability. As a result, Tan says, consumers are putting off major purchases like homes and vehicles. That is happening despite broad income growth that’s matched or even outpaced inflation in recent years.

While the compounding impacts of inflation and economic insecurity make debt servicing an even more challenging issue for Canadians, Tan notes that there is some hope for those who invested in equities. Markets are at all time highs tight now and that appreciation might help offset a decline in net worth from property prices falling. It could also be a useful moment to take some profits to help pay down existing debt and make the mortgage renewal more bearable on a monthly basis. Advisors, however, have to have the conversation with their clients about how they can strike the balance between making today’s debt more manageable and investing for the future.

Tan acknowledges how difficult, nuanced, and individual the conversation about paying down debt or investing can be right now. She argues, though, that advisors can begin to manage that conversation by starting with a bird’s eye view. By looking at a client’s whole net worth, the capital market assumptions for their portfolio, the cost of their mortgage, and their time horizon an advisor can work out which levers need to be pulled, and by how much, to make the client’s financial picture make sense. At the same time, however, Tan acknowledges the emotional side of these decisions. She notes that issues of economic uncertainty and the relationship people have with their homes will all weigh on how clients manage these questions. Through it all, Tan says that she’s seeing advisors prioritize client wellbeing over everything else.

“The advisors that I’ve spoken to, they just recognize that we need to do what’s best for the client. And if it means in the short term, that their investment assets do draw down, that’s okay. Because the most important thing is to ensure that our clients come out on the other side of this,” Tan says. “At some point, rates will normalize again, and in fact, they are, because the worst of the rate shock will be cresting in early 2027. We’re getting to the worst of it now, and it’ll start to moderate as we get through the rest of this year.”

This article was written by David Kitai and is reposted from the Wealth Professional website.

Canadian banks are set to report first-quarter results that analysts expect will show an earnings boost from trading as well as muted loan growth amid a still-tepid housing market.

By Ian Bickis

Banks have been able to drive their earnings higher in recent quarters despite economic headwinds as their capital markets divisions have benefited from frothy stock markets and corporate activity.

The first quarter, which includes a bump from year-end trading, should continue the trend despite lower fee revenue in capital markets, said RBC analyst Darko Mihelic in a note.

He warned investors, however, that given the contrast between bank valuations and weaker Canadian economic data, any signs of slowing momentum could make further stock gains difficult.

“We suggest approaching the group with caution,” he said.

The weaker economic data includes home sales that have shown continued downward pressure.

The Canadian Real Estate Association says home sales in January fell 16.2% compared with a year earlier, and December sales were down 4.5% from the same month a year earlier.

The job picture has been mixed, with unemployment dropping in January because fewer people were looking for work, while the actual number of people with jobs fell by 25,000.

Overall, RBC expects the latest GDP figures to be released on Friday will show Canadian economic growth flatlined in the fourth quarter.

The trends have kept loan growth subdued at banks, but hasn’t become enough of a strain to significantly shift bank provisions for potentially bad loans.

Banks built up their provisions as interest rates rose and a wave of mortgage renewals heightened fears of a spike in defaults, but so far that hasn’t happened with delinquency rates still below long-term trends.

Provisions should continue with the trend, but any downward shift would be notable, said National Bank analyst Gabriel Dechaine.

“Although we don’t expect it, any changes to the credit outlook so soon after reiterating the base case of ‘improvement in the second half’ could hit sector valuation,” he said in a note.

Given the lack of loan growth, banks are instead devoting more capital to share buybacks, which not only boost stock prices but also the crucial earnings per share metric.

Overall, earnings coming in ahead of expectations in the first quarter could also boost the longer-term outlook for earnings per share, said Scotiabank analyst Mike Rizvanovic.

“We remain positive on the large Canadian banks heading into Q1 earnings season that we suspect will once again feature strong results in market-sensitive businesses, upside to all-bank margins … and credit losses remaining in a very manageable range.”

Scotiabank reports Tuesday, BMO Financial Group and National Bank of Canada are set to report their results on Wednesday while CIBC, TD Bank and Royal Bank of Canada are scheduled for Thursday.

This article is reposted from the Canadian Mortgage Trends website.

The country’s housing market was stone cold in January and the Canadian Real Estate Association is blaming the weather – or at least the weather in parts of southern Ontario. Record setting snowfalls and ferociously cold temperatures appear to have kept house hunters indoors.

Seasonally adjusted sales were down nearly 6.0% in January compared to December. Still, more than 22,500 properties changed hands. The national average sales price slipped 2.6% compared to a year earlier.

CREA is not letting the weather cool its expectations for 2026 though. The Association is forecasting 5.1% sales growth and 2.8% price growth in 2026, driven by pent-up demand and a pent-up desire to sell. That desire to sell may be showing itself. New listings rose more than 7.0%, tipping the market further in favour of buyers.

There is a feeling among some realtors that, while the weather may have been a factor in January, the slump is a hold-over from the end of 2025. They say buyers, especially first-timers, are waiting for greater improvements in affordability through further price reductions and, perhaps, lower interest rates.

The latest inflation numbers suggest there may be some merit in that thinking. Statistics Canada reports headline inflation dipped to 2.3% in January, down from 2.4% in December. Most of the decline came from falling gasoline prices, but shelter inflation continues to slow as well. It dropped below 2.0% for the first time in five years. Hopes for lower interest rates seem more remote though. The Bank of Canada has been clear, it will not be moving rates unless there are very strong reasons to do so.

This article is reposted from First National Finacial’s Marketing Team.

The province’s new program lets eligible first-time buyers purchase with just two per cent down through select credit unions, but brokers warn the trade-offs could limit flexibility and increase long-term costs.

Nova Scotia’s new pilot program to help first-time homebuyers enter the housing market is drawing national attention, as industry experts assess how the initiative intersects with federal mortgage insurance rules and whether it could work beyond the province.

The program, announced last week, is being offered through participating credit unions and allows eligible buyers to purchase a home with as little as a two per cent down payment. Nova Scotia will assume the part of the risk typically covered by mortgage insurers.

While the initiative is intended to improve access to homeownership, industry observers say the pilot’s wider, long-term impact will depend on borrower risk, lender participation, and federal insurer support.

“I like the idea of more people getting into the marketplace and having a lower down payment,” Clinton Wilkins, principal broker at the Halifax, N.S.-based Clinton Wilkins Mortgage Team, told Canadian Mortgage Trends. “But the concern for me is if you’re only putting down two per cent, do you have no other resources? What happens if something goes wrong in the home as well? There’s no fallback position.”

Under the pilot, eligible applicants must have a household income below $200,000, a minimum credit score of 630, and meet standard stress-test requirements.

The program applies to owner-occupied homes priced up to $570,000 in Halifax Regional Municipality and East Hants, and $500,000 elsewhere in the province. Loans issued under the pilot are not insured by federal agencies. Instead, the province provides a deficiency guarantee in place of traditional mortgage insurance.

Because the provincial guarantee is tied to participating credit unions and is not transferable, borrowers would generally need to build at least 20% equity before refinancing or moving the mortgage to another lender.

Concerns about flexibility and long-term costs

Some brokers say those conditions could limit borrowers’ flexibility and increase their long-term borrowing costs.

“The cost of borrowing from a credit union in Nova Scotia is typically one to two per cent higher than we would get from another prime lender,” Wilkins says. “If you’re only putting down two per cent and have no high-ratio insurance, you’re going to be stuck with that credit union likely for five, 10, or 15 years.”

Wilkins says the program could be more beneficial in rural parts of the province, where credit unions often play a larger role in mortgage lending and access to traditional bank branches, and brokers are more limited.

He noted that in those markets, the initiative could help expand homeownership opportunities for buyers who may otherwise face fewer financing options. By contrast, he said the program could negatively impact Halifax’s already competitive housing market.

“The average price point in Halifax is over $600,000,” Wilkins said. “I fear that it may put some additional stress on that sub-$570,000 price point.”

Could the model go national?

Others say the program’s broader impact will depend on how well it aligns with federal mortgage insurance rules and provincial housing policy.

Leigh Graham, a Kingston, Ont.- based broker and partner at The Mortgage Professionals, says the pilot program highlights the complexity of coordinating provincial affordability initiatives with federal lending frameworks. “When somebody’s buying with less than 20% down and they need the government insurance, the insurance factor is still a federal matter,” Graham says.

However, if a government insurer like Canada Mortgage and Housing Corporation decides the program is viable, Graham says there’s no reason it couldn’t or shouldn’t spread across the country. It would just depend on how lenders engage with the program at a provincial level.

Graham notes that down payment requirements are only one part of the affordability equation. “Qualification remains the single largest challenge,” he says. “Starter home prices in many Ontario markets are much higher than what average incomes will allow.”

Implications for consumer choice

Given the Nova Scotia pilot’s limitation to 14 specific credit unions, Graham cautions that the structure could restrict consumer choice. “It could end up being a potentially proprietary program for specific lenders,” he says. “That could be challenging for a consumer.”

Michelle Drover, vice-president at Halifax-based Premiere Mortgage Centre, says buyers who enter the pilot through credit unions may face significant constraints when their terms expire. “If somebody takes this product with the credit union, they have no equity,” Drover said. “When the mortgage comes up for renewal, where are they going to switch it? They can’t transfer it to an insured lender because it’s not insured.”

She said limited mobility can weaken borrowers’ negotiating power over time. “We’re in this industry because we’re advocates for our clients,” she said. “We want to ensure that they have options available to them.”

Drover added that first-time buyers should carefully compare the pilot with other available programs before committing. “Go with your eyes wide open and look at all of the options available to you,” she said. “[This] looks pretty, but when you unwrap it, it’s not very pretty inside.”

Written by Andrew Seale, Mortgage Industry News, February 12, 2026 and sourced from Canadian Mortage Trends.

The Canada Mortgage and Housing Corp. says it sees signs of financial stress among homeowners in Toronto and Vancouver, with missed mortgage payments projected to steadily increase.

First-time buyers who purchased during the COVID-19 pandemic when interest rates were lower also show greater signs of vulnerability.

Figures from CMHC show that while missed mortgage payments have risen, they are at historic lows. The report says some borrowers are extending their amortization periods to help lower their monthly payments.

The national housing agency says more than 1.5 million households have renewed their mortgage at higher interest rates, with another million expected to do so in the coming year.

Tania Bourassa-Ochoa, CMHC deputy chief economist, says most Canadians have been resilient while facing higher interest rates at renewal.

She says extending the length of a mortgage has helped households manage short-term finances, but it comes at a greater longer-term expense.

Written by

The Canadian Press
Mortgage Industry News, Mortgage Industry News
February 5, 2026

Real estate activity in the Vancouver area got off to a slow start this year as residential sales in the region totalled 1,107 last month, down 28.7% from January 2025.

Greater Vancouver Realtors says the number of properties that changed hands was also 30.9% below the 10-year seasonal average.

The composite benchmark price for all residential properties was $1,101,900, down 5.7% from the same time last year and 1.2% lower than December.

The board’s chief economist and vice-president of data analytics Andrew Lis says that while the January data may “appear alarming,” the quiet pace to kick off 2026 is unsurprising after last year ended with one of the lowest sales totals in more than two decades.

There were 5,157 new listings on the market last month, down 7.3% from a year earlier but 19.4% above the 10-year average.

Total inventory grew 9.9% year-over-year to 12,628, which was 38% above the long-term average.

Written by:

The Canadian Press
Real Estate
February 3, 2026

The Bank of Canada today held its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%.

Major economies around the world continue to show resilience to US trade protectionism, but uncertainty is still high. In the United States, economic growth is being supported by strong consumption and a surge in AI investment. The US government shutdown caused volatility in quarterly growth and delayed the release of some key economic data. Tariffs are causing some upward pressure on US inflation. In the euro area, economic growth has been stronger than expected, with the services sector showing particular resilience. In China, soft domestic demand, including more weakness in the housing market, is weighing on growth. Global financial conditions, oil prices, and the Canadian dollar are all roughly unchanged since the Bank’s October Monetary Policy Report (MPR).

Canada’s economy grew by a surprisingly strong 2.6% in the third quarter, even as final domestic demand was flat. The increase in GDP largely reflected volatility in trade. The Bank expects final domestic demand will grow in the fourth quarter, but with an anticipated decline in net exports, GDP will likely be weak. Growth is forecast to pick up in 2026, although uncertainty remains high and large swings in trade may continue to cause quarterly volatility.

Canada’s labour market is showing some signs of improvement. Employment has shown solid gains in the past three months and the unemployment rate declined to 6.5% in November. Nevertheless, job markets in trade-sensitive sectors remain weak and economy-wide hiring intentions continue to be subdued.

CPI inflation slowed to 2.2% in October, as gasoline prices fell and food prices rose more slowly. CPI inflation has been close to the 2% target for more than a year, while measures of core inflation remain in the range of 2½% to 3%. The Bank assesses that underlying inflation is still around 2½%. In the near term, CPI inflation is likely to be higher due to the effects of last year’s GST/HST holiday on the prices of some goods and services. Looking through this choppiness, the Bank expects ongoing economic slack to roughly offset cost pressures associated with the reconfiguration of trade, keeping CPI inflation close to the 2% target.

If inflation and economic activity evolve broadly in line with the October projection, Governing Council sees the current policy rate at about the right level to keep inflation close to 2% while helping the economy through this period of structural adjustment. Uncertainty remains elevated. If the outlook changes, we are prepared to respond. The Bank is focused on ensuring that Canadians continue to have confidence in price stability through this period of global upheaval.

Information note
The next scheduled date for announcing the overnight rate target is January 28, 2026. The Bank’s next MPR will be released at the same time.

This article was posted on the Bank of Canada Website