Canada’s job market took a hit this past month, with 65,500 jobs lost nationwide. What’s especially concerning is that these weren’t just entry-level positions. Much of the decline came from core-aged workers between 25 and 54, many of them in skilled and technical roles like research, technology, and manufacturing. The rise in unemployment is pushing jobless numbers back to levels last seen during the pandemic, adding to concerns that the labour market is weakening.
Unemployment Rate Change
The chart above, sourced from the Bank of Canada, highlights the national unemployment rate with a red line. The red line shows August’s unemployment returning to mid-pandemic levels, highlighting a weakening labour market.
Ottawa Launches Build Canada Homes
In response to the ongoing housing affordability crisis, the federal government has announced a new agency called Build Canada Homes. Its goal is to accelerate the construction of affordable housing by reducing upfront costs for developers, making greater use of public lands, and ensuring that existing affordable rental units are preserved.
By tackling both supply and preservation, the agency hopes to make meaningful progress in easing housing pressures across the country.
Bank of Canada Cuts Rates
Bank of Canada Governor Tiff Macklem
The Bank of Canada lowered its key interest rate from 2.75% to 2.50% on Wednesday and lenders are expected to follow by trimming their prime rate from 4.95% to 4.70%. For homeowners with a variable rate mortgage, the impact will be immediate. On average, borrowers can expect about $20 per month savings in interest per $100,000 of mortgage borrowed on a variable rate mortgage.
For those considering a fixed rate mortgage, the story is a little different. Fixed rates aren’t tied directly to the Bank of Canada’s moves instead; they follow bond yields. If Canada’s economy continues to slow, bond yields may decline, which could open the door to lower fixed rates in the months ahead. In short: variable-rate borrowers benefit right away, while fixed-rate borrowers will have to wait to see relief down the road.
If you need more information regarding mortgages or if you need any advice on your personal situation please contact our office at 604-556-3893 or email at alex.kotai@ymscanada.ca.
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