Today I heard the Bank of Canada Governor, Mark Carney speak at The Kitchener/Waterloo Chamber of Commerce lunch. Although the food was terrible, Carney's sense of humour and insight into the challenges of the Canadian economy left me with indigestion about Canada's housing market.
The growth and strength in the Canadian economy has largely been dependent on consumer spending. Essentially, spending the equity that Canadian's have in their homes. Canada's exports have lagged because our economy is still dependant on the U.S. as it's major trading partner. Carney suggested that Canada needs to invest more in emerging markets such as China and India.
What about the housing market and rising rates? Nothing was mentioned in his talk this afternoon.
What was interesting is Canada's economic reliance on construction. If housing starts cool, and as rates increase, a slow down in construction may have a wider impact on the employment rate.
By-the-way, I did get to shake Mark Carney's hand...it was soft!
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