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Poloz maintains interest rates won’t solve Toronto’s housing mess Add to ...

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The Bank of Canada remains clear that it doesn’t want to use its interest rates to put the brakes on the runaway Toronto-area housing market. But at the same time, the path is in sight for the bank to contribute a rate hike or two to the solution.

In discussing its latest interest rate decision and quarterly economic outlook Wednesday, the Bank of Canada sounded perhaps more concerned than ever about a rising housing tide in and around Canada’s biggest city. It has now started to talk about the price surge as a “Golden Horseshoe” issue, reflecting its widening geographic spread in Canada’s biggest regional economy. Bank of Canada Governor Stephen Poloz used the word “unsustainable,” and said that “of course it’s vulnerable to a correction.” And he repeated the bank’s position that if the chips were to fall badly, this poses a meaningful risk to the stability of the country’s financial system.

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