As expected, the Bank of Canada held its benchmark interest rate unchanged at 2.75% at today’s meeting, the third consecutive rate hold since the Bank cut overnight rates seven times in the past year. The Governing Council noted that the unpredictability of the magnitude and duration of tariffs posed downside risks to growth and lifted inflation expectations, warranting caution regarding the continuation of monetary easing.

Trade negotiations between Canada and the United States are ongoing, and US trade policy remains unpredictable.

While US tariffs are disrupting trade, Canada’s economy is showing some resilience so far. Several surveys suggest consumer and business sentiment is still low, but has improved. In the labour market, we are seeing job losses in the sectors that rely on US trade, but employment is growing in other parts of the economy. The unemployment rate has moved up modestly to 6.9%.

Inflation is close to the BoC’s 2% target, but evidence of underlying inflation pressures continues. “CPI inflation has been pulled down by the elimination of the carbon tax and is just below 2%. However, a range of indicators suggests underlying inflation has increased from around 2% in the second half of last year to roughly 2½% more recently. This largely reflects an increase in prices for goods other than energy. Shelter cost inflation remains the biggest contributor to CPI inflation, but it continues to ease. Surveys indicate businesses’ inflation expectations have fallen back after rising in the first quarter, while consumers’ expectations have not come down”.

The Bank asserted today that there are reasons to think that the recent increase in underlying inflation will gradually unwind. The Canadian dollar has appreciated, which reduces import costs. Growth in unit labour costs has moderated, and the economy is in excess supply. At the same time, tariffs impose new direct costs, which will be gradually passed through to consumers. In the current tariff scenario, upside and downside pressures roughly balance out, so inflation remains close to 2%.

The central bank provided alternative scenarios for the economic outlook. In the de-escalation scenario, lower tariffs improve growth and reduce the direct cost pressures on inflation. In the escalation scenario, higher tariffs weaken the economy and increase direct cost pressures.

So far, the global economic consequences of US trade policy have been less severe than feared. US tariffs have disrupted trade in significant economies, and this is slowing global growth, but by less than many anticipated. While growth in the US economy looks to be moderating, the labour market has remained solid. And in China, lower exports to the United States have largely been replaced with stronger exports to other countries.

In Canada, we experienced robust growth in the first quarter of 2025, primarily due to firms rushing to get ahead of tariffs. In the second quarter, the economy looks to have contracted, as exports to the United States fell sharply—both as payback for the pull-forward and because tariffs are dampening US demand.

The gap between the 2.75% overnight policy rate in Canada and the 4.25-4.50% policy rate in the US is historically wide. Another cause of uncertainty is the fiscal response to today’s economic challenges. The One Big Beautiful Bill has passed, and it will add roughly US$4 trillion to the already burgeoning US federal government’s red ink. This has caused a year-to-date rise in longer-term bond yields, steepening the yield curve.

The slowdown of the housing sector since Trump’s inauguration has been a substantial drain on the economy.  The Monetary Policy Report (MPR) for July states that “growth in residential investment strengthens in the second half of 2025, partially due to an increase in resale activity after the steep decline in the first half of the year. Growth in residential investment is moderate over 2026 and 2027, supported by dissipating trade uncertainty and rising household incomes.”

Bottom Line

We expect the Canadian economy to post a small negative reading (-0.8%) in Q2 and (-0.3%) in Q3, bringing growth for the year to 1.2%. The next Governing Council decision date is September 17, which will give the  Bank time to assess the underlying momentum in inflation and the dampening effect of tariffs on economic activity.

If inflation slows over the next couple of months and the economy slows in Q2 and Q3 as widely expected, the Bank will likely cut rates one more time this year, bringing the overnight rate down to 2.50%, within the neutral range for monetary policy. Bay Street economists have varying views on the rate outlook (see chart above). While the Fed will hold rates steady today, despite the incredible pressure coming from the White House, the Bank of Canada could well cut rates one more time this year.

The Canadian economy refuses to buckle under the weight of tariff uncertainty and further potential tariff hikes. The Labour Force Survey, released this morning for June, showed a surprising net new job gain of 83,100 positions, the most significant number of jobs this year. A whopping 84% of the employment gain was in part-time work.

June marked the first time in five months when the economy created enough jobs to keep unemployment from rising, after months of tepid gains and losses. At the same time, Canada added a net of 143,800 jobs over the last six months, the slowest first-half year pace since 2018, excluding the pandemic, with a monthly average of 24,000 job gains.

The central bank has held interest rates at 2.75% for the past two meetings, and its path ahead will depend mainly on how the economy and inflation adapt to tariffs and trade uncertainty. While the economy is expected to slow in the second quarter, firm inflation remains a concern for policymakers, who will set rates again on July 30.

Traders in overnight swaps trimmed expectations of easing at that meeting, putting the odds of a quarter percentage point cut at about 15%, from 30% before the release.

The employment rate—the proportion of the population aged 15 years and older who are employed—increased by 0.1 percentage points to 60.9% in June. The employment rate had previously recorded a cumulative decline of 0.3 percentage points in March and April and had held steady in May.The number of employees increased in both the private (+47,000; +0.3%) and public (+23,000; +0.5%) sectors in June, while the number of self-employed workers was little changed.

The unemployment rate increased 0.1 percentage points to 7.0% in May, the highest rate since September 2016 (excluding 2020 and 2021, during the pandemic). The uptick in May was the third consecutive monthly increase; since February, the unemployment rate has risen by 0.4 percentage points.

There were 1.6 million unemployed people in May, an increase of 13.8% (+191,000) from 12 months earlier. A smaller share of people who were unemployed in April transitioned into employment in May (22.6%), compared with one year earlier (24.0%) and compared with the pre-pandemic average for the same months in 2017, 2018 and 2019 (31.5%) (not seasonally adjusted). This indicates that people face greater difficulties finding work in the current labour market.

The average duration of unemployment has also been rising; unemployed people had spent an average of 21.8 weeks searching for work in May, up from 18.4 weeks in May 2024. Furthermore, nearly half (46.5%) of people unemployed in May 2025 had not worked in the previous 12 months or had never worked, up from 40.7% in May 2024 (not seasonally adjusted).

The layoff rate—representing the proportion of people who were employed in April but became unemployed in May as a result of a layoff—was 0.6%, unchanged from May 2024 (not seasonally adjusted).

The unemployment rate fell 0.1 percentage points to 6.9% in June, the first decrease since January. Before this decline, the unemployment rate had increased for three consecutive months ending in May 2025, reaching its highest level (7.0%) since September 2016 (excluding 2020 and 2021, during the COVID-19 pandemic).

In June, the unemployment rate among core-aged women fell 0.3 percentage points to 5.4%. Among core-aged men, it was little changed at 6.1%, as the number of job searchers held steady despite the employment gains.

Notably, age 25-54 employment rose 90,600 (which is the most significant increase on record, excluding the 2020-2022 pandemic distortion), lowering their jobless rate to 5.8%, reversing May’s increase.

There were 1.6 million unemployed people in June, little changed in the month but up 128,000 (+9.0%) on a year-over-year basis.

Compared with one year earlier, long-term unemployment was up in June 2025. Over one in five unemployed people (21.8%) had been searching for work for 27 weeks or more in June, an increase from 17.7% in June 2024.

More people are employed in wholesale and retail trade, health care, and social assistance.

Employment in wholesale and retail trade increased by 34,000 (+1.1%) in June, the second consecutive monthly gain. The increase in June was concentrated in retail trade (+38,000; +1.7%). On a year-over-year basis, employment in wholesale and retail trade was up by 84,000 (+2.9%).

Employment also rose in health care and social assistance (+17,000; +0.6%) in June, the first notable change since December 2024. Compared with 12 months earlier, employment in the industry grew by 78,000 (+2.8%) in June 2025.

Agriculture was the only industry with a notable employment decline (-6,000; -2.6%) in June. On a year-over-year basis, employment in agriculture was little changed. Amazingly, the manufacturing sector showed a considerable job gain in June, rising 10,500, breaking a four-month losing streak. GDP may bounce back in June, but Q2 is still tracking negative, suggesting productivity was much softer, too.

Regionally, Alberta, Ontario and Quebec accounted for the bulk of job gains, while Atlantic Canada was a soft spot. Ontario’s jobless rate slipped a tick to 7.8%, still well above the national average and the highest among the larger provinces. That comes in sharp contrast to B.C., where a significant decline in the labour force pulled the unemployment rate down 0.8 ppts to 5.6%, third lowest in the country behind Saskatchewan (4.9%) and Manitoba (5.5%).

Hours worked were solid as well,  up 0.5% m/m in June, leaving them up 1.3% annualized for the quarter.

Bottom Line

Wage inflation also continues to decelerate, providing some relief for the Bank of Canada. However, with the labour market showing some resilience, the odds of an overnight rate cut in July are minimal.

In other news, Trump Threatens 35% Tariff on Some Canadian Goods: The U.S. will put a 35% tariff on imports from Canada effective Aug. 1, President Trump announced on Thursday evening. But an exemption for goods that comply with the nations’ free-trade agreement, the U.S.-Mexico-Canada Agreement, would still apply, accounting for just over 90% of Canadian-US trade. A White House official said, stressing that it could change. WSJ

Barring a sharp decline in next week’s CPI data for June, which is unlikely, the strength in today’s jobs report and the recently heightened uncertainty on the trade front likely keep the BoC on the sidelines when it meets late this month.

If you’re interested in buying a vacation home, there is a lot to consider. A good first step to purchasing any vacation home is to think about your 5- and 10-year plan.

Will you get enough use out of it?

Do you have other more immediate or important financial goals?

What’s the opportunity cost?

If you’re set on the vacation home, but don’t plan on paying cash for the property, the next step will be to plan how to finance it. Here’s what to ask yourself:

• Do you have enough saved for a downpayment? A second property could need anywhere between 5-20%+ downpayment. Some factors to consider are if it’s winterized, mortgage insurance requirements in relation to the purchase price, etc.
• Can you afford the purchase? Your income will have to be such that you can take on the additional debt. Consider having a close look at your current expenses, and see how much room you have within your current situation.
• Will the location/property be eligible for financing? Remote locations or properties outside Canada may not qualify for a mortgage, so you might need to get creative.
• Will it be owner-occupied or an investment property? Depending on who lives in or uses the dwelling, there will be different mortgage and tax implications.

If you’re in a good place to move forward with purchasing a vacation home, the next step is selecting a location. A few considerations:

• Current and future development of the area
• Municipal services available
• Transportation to and from your property
• Long term property value
• Seasonal access issues

Another big factor in purchasing a vacation home is deciding what will happen to it while you’re not there. Will you rent it out? Will you have a property manager? What’s needed to keep the insurance valid on the property?

If you’re not sure about any of what you’ve just read, a great first step is to get in touch! As your mortgage broker, I can help you calculate your debt servicing ratios, determine what you’re eligible for, and come up with creative financing solutions if needed. We can look at second mortgages, reverse mortgages, and other options to get you into the property of your dreams.

Real gross domestic product (GDP) edged down 0.1% in April, following a 0.2% increase in March. The preliminary estimate for May was also -0.1%.

April and May were months of the most significant tariff uncertainty–both auto, steel, and aluminum tariffs were announced during this period. The 0.1% drawdown in April GDP had a wide variety of special factors at play in that month of high drama. The biggest drag by far was a steep 1.9% fall in manufacturing, including a 5.2% drop in the auto sector, as firms dealt with the initial wave of tariffs, as well as some further pullback after earlier tariff front-running.

Tariff front-running led to a surge in US imports in the first quarter. Revisions to the Q1 data in the States now show a 0.5% contraction, worse than initially reported.

Other trade-related sectors were soft, with wholesale trade down 1.9% and transportation & warehousing off 0.2%. Providing some offset was the Federal election in the month, which boosted federal public administration 2.8% m/m. StatCan notes that the start of the NHL playoffs, with five Canadian teams in the mix (more than usual), boosted the arts and entertainment sector by 2.8%. Hotels and restaurants also firmed (+0.6%), potentially supported by Canadians vacationing closer to home, and the NHL playoffs may have also contributed to the increase. Were it not for the election boost and entertainment, real GDP would have been down 0.2% in April.

May’s expected drop was due, in part, to the reversal of the election bump in public administration spending, as well as softness in the resource sector and retail trade. Notably, StatCan did not mention manufacturing as a source of weakness. Still, earlier this week, it reported a 1.3% drop in May factory sales and a 0.4% decline in wholesale in flash reports, which no doubt also weighed.

In other news, the US released its May personal consumption expenditures, which fell 0.3% after adjusting for inflation. President Trump’s economic policies are weighing on the outlook for US growth, which could prompt the Fed to take action in the coming months.

The Federal Reserve’s preferred inflation gauge, the PCE price index minus food and energy, rose 0.2% — slightly more than expected, though still consistent with limited price pressures.

The decline in spending, which was broad-based, coincides with depressed consumer sentiment this year in response to President Donald Trump’s unpredictable trade policy. Inflation has been muted so far in 2025, although many economists expect it to pick up in the next few months as businesses increasingly pass higher import duties on to households.

The latest figures suggest sluggish US household demand, especially for services, extended into May after the weakest quarter for personal consumption since the onset of the pandemic. Spending on transportation services, meals out, accommodation, financial services, and other services — a category that includes net foreign travel — all declined last month. US personal income, meanwhile, fell in May by the most since 2021 on a pullback in government transfers, led by a decrease in Social Security payments. The saving rate fell to 4.5%.

Bottom Line

Chair Jay Powell told Congress this week that he expects inflation to pick up in June, July and August as tariffs become increasingly reflected in consumer prices. However, he added that if that prediction fails to materialize, the US central bank could resume interest-rate reductions sooner rather than later.

Weaker consumer and business spending, along with modest inflation, bode well for another rate cut by the Bank of Canada as well. There is another whole month of data before the BoC meets again on July 30. Many economists now believe the Bank’s rate-cutting cycle is over.

The Consumer Price Index (CPI) rose 1.7% year-over-year in May, matching the 1.7% increase in April.

A reduced rent price increase and a decline in travel tour prices put downward pressure on the CPI in May compared with one year earlier. Smaller declines for gas and cellular services put upward pressure on the index compared with the previous month.

Excluding energy, the CPI rose 2.7% in May, following a 2.9% increase in April.

The CPI rose 0.6% in May, and on a seasonally adjusted monthly basis, it was up 0.2%.
The shelter component grew more slowly year over year in May, rising 3.0% following a 3.4% increase in April.

Rent prices rose 4.5% yearly in May, compared with a 5.2% increase in April. Rent price growth slowed the most in Ontario, with prices rising 3.0% in May following a 5.4% increase in April. The increased availability of rental units, coupled with slower population growth compared with the previous year’s spring, contributed to the slowdown in rent price growth in May. Given Ontario’s considerable weight nationally, these effects alone were enough to offset faster price growth in seven other provinces.

The mortgage interest cost index decelerated for the 21st consecutive month in May (6.2%)  after rising 6.8% in April.

Year over year, prices for travel tours fell 0.2% in May after rising 6.7% the previous month. Prices for air transportation decreased 10.1% on an annual basis in May, following a 5.8% decline in April.

Gasoline led the decline in consumer energy prices again this month, down 15.5% year over year in May after declining 18.1% in April. Gasoline prices in May remained below May 2024 levels, primarily due to the removal of the consumer carbon levy.

In May 2025, gasoline prices increased 1.9% month over month. The increase was primarily attributed to higher refining margins, partially due to higher switching costs to summer blends.

Prices for new passenger vehicles rose 4.9% yearly in May, after increasing 4.6% in April. Higher prices for some electric cars primarily drove this faster price growth.

After last month’s unpleasant inflation surprise, May’s data came in as expected. Top-line inflation continues to be restrained as the impact of the end to the consumer carbon tax offset changes in energy prices. Core inflation had good news, too, as all four measures cooled amid falling travel, tour and rent prices. The ongoing challenges in the housing market (particularly in Ontario) should help temper further rent gains in the coming months.

After last month’s uptick in core inflation, some give-back was expected. The labour market remains soft, and tepid domestic demand growth should keep a lid on inflationary pressures. Retail sales were weaker than expected. As has been the case this year, the outlook heavily depends on how trade negotiations evolve, but the soft economic backdrop should give the BoC space to deliver two more cuts this year

Bottom Line

The Bank of Canada has said that it doesn’t want to see a tariff problem turn into an inflation problem. It has also suggested that its CPI trimmed-mean and CPI Median measures of core inflation might be biased upward because of measurement issues (They are expected to publish more about this in the future.)

While the Bank won’t give up its hard-won credibility as an inflation fighter, further easing in economic growth will likely force the central bank to cut rates one or two more times this year.

Canadian existing home sales recorded over the MLS Systems climbed 3.6% between April and May, a normally strong month for housing, marking the first gain in activity since last November.

The Greater Toronto Area (GTA), Calgary, and Ottawa led the monthly increase.

“May 2025 not only saw home sales move higher at the national level for the first time in more than six months, but prices at the national level also stopped falling,” said Shaun Cathcart, CREA’s Senior Economist. “It’s only one month of data, and one car doesn’t make a parade, but there is a sense that maybe the expected turnaround in housing activity this year was just delayed for a few months by the initial tariff chaos and uncertainty.”

New Listings

New supply declined by 1% month-over-month in April. Combined with flat sales, the national sales-to-new listings ratio climbed to 46.8% compared to 46.4% in March. The long-term average for the national sales-to-new listings ratio is 54.9%, with readings between 45% and 65% generally consistent with balanced housing market conditions.

At the end of April 2025, 183,000 properties were listed for sale on all Canadian MLS® Systems, up 14.3% from a year earlier but still below the long-term average of around 201,000 listings.

“The number of homes for sale across Canada has almost returned to normal, but that is the result of higher inventories in B.C. and Ontario, and tight inventories everywhere else,” said Valérie Paquin, CREA Chair.

There were 5.1 months of inventory on a national basis at the end of April 2025, which is in line with the long-term average of five months. Based on one standard deviation above and below that long-term average, a seller’s market would be below 3.6 months and a buyer’s market above 6.4 months.

New supply rose by 3.1% month-over-month in May. Given a similar increase in sales activity, the national sales-to-new listings ratio was 47%, almost unchanged from 46.8% in April. The long-term average for the national sales-to-new listings ratio is 54.9%, with readings between 45% and 65% generally consistent with balanced housing market conditions.

At the end of May 2025, 201,880 properties were listed for sale on all Canadian MLS® Systems, up 13.2% from a year earlier but remaining about 5% below the long-term average of around 211,500 listings for the month.

“May saw an increased number of new listings hitting the market early in the month, followed by a higher number of transactions in the second half of the month, so overall more sellers and buyers compared to April,” said Valérie Paquin, CREA Chair. “It seems like this may carry over into June as well.”

There were 4.9 months of inventory nationally at the end of May 2025, near the long-term average of five months. Based on one standard deviation above and below that long-term average, a seller’s market would be below 3.6 months, and a buyer’s market would be above 6.4 months.

Home Prices

The National Composite MLS® Home Price Index (HPI) was relatively unchanged (-0.2%) from April to May 2025. The pause follows three straight month-over-month declines of closer to 1%. The non-seasonally adjusted National Composite MLS® HPI was down 3.5% compared to May 2024

Bottom Line

The First-Time Homebuyers GST Rebate on newly built homes took effect for purchase agreements dated on or after May 27. This may bring some additional buyers into sales offices, but it’ll be a while before those projects break ground and show up in the housing starts statistics. In the resale market, May saw the first signs of optimism in home sales in six months, but sales remain at the low end of seasonal norms. While trade war uncertainty still looms, average and benchmark prices have fallen to about 17% below their early 2022 peaks. The opportunity may have been too good for some buyers to pass up.

New listings picked up about 3% from April, while inventory held steady at nearly five months. With this excess supply in the market, average sale prices ticked up only slightly in May but remain flat over the past year, while the benchmark price declined marginally.

Regional differences remained significant. Home sales reversed course in Quebec City, but the average selling price increased, reaching a new high. Despite stronger sales in Toronto and Vancouver, these cities remained deep in buyer’s market territory.

While one good month of home sales doesn’t make a trend, there may be signs of cautious optimism for the resale market for those buyers who remain little affected by the ongoing trade war. The combination of lower prices, more inventory and less economic uncertainty should continue to entice more homebuyers back into the market this summer. This would be more likely if the Bank of Canada cuts rates again, which could well happen in July if the inflation readings improve, especially for core inflation.

Today’s Labour Force Survey for March was weaker than expected. Employment decreased by 33,000 (-0.2%) in March, the first decrease since January 2022. The decline in March followed little change in February and three consecutive months of growth in November, December and January, totalling 211,000 (+1.0%).

Today’s Labour Force Survey for May showed a marked adverse impact of tariffs on the Canadian economy. Employment held steady for the second consecutive month at a modest net job change of 8,800–below expectations.

Growth in full-time employment (+58,000; +0.3%) was offset by a decline in part-time work (-49,000; -1.3%). There has been virtually no employment growth since January, following substantial gains from October 2024 to January 2025 (+211,000; +1.0%).

The employment rate—the proportion of the population aged 15 and older—was unchanged at 60.8% in May, matching a recent low observed in October 2024. The employment rate had fallen for two consecutive months in March (-0.2 percentage points) and April 2025 (-0.1 percentage points).
The number of private sector employees rose by 61,000 (+0.4%) in May, the first increase since January. Public sector employment fell by 21,000 (-0.5%) in the month, following an increase in April that was partly attributable to the hiring of temporary workers for the federal election. Self-employment also fell (-30,000; -1.1%) in May, the first significant decrease since May 2023.

The unemployment rate increased 0.1 percentage points to 7.0% in May, the highest rate since September 2016 (excluding 2020 and 2021, during the pandemic). The uptick in May was the third consecutive monthly increase; since February, the unemployment rate has risen by 0.4 percentage points.

There were 1.6 million unemployed people in May, an increase of 13.8% (+191,000) from 12 months earlier. A smaller share of people who were unemployed in April transitioned into employment in May (22.6%), compared with one year earlier (24.0%) and compared with the pre-pandemic average for the same months in 2017, 2018 and 2019 (31.5%) (not seasonally adjusted). This indicates that people face greater difficulties finding work in the current labour market.

The average duration of unemployment has also been rising; unemployed people had spent an average of 21.8 weeks searching for work in May, up from 18.4 weeks in May 2024. Furthermore, nearly half (46.5%) of people unemployed in May 2025 had not worked in the previous 12 months or had never worked, up from 40.7% in May 2024 (not seasonally adjusted).

The layoff rate—representing the proportion of people who were employed in April but became unemployed in May as a result of a layoff—was 0.6%, unchanged from May 2024 (not seasonally adjusted).

Total hours worked were unchanged in May but were up 0.9% compared with 12 months earlier.

Average hourly wages among employees increased 3.4% (+$1.20 to $36.14) year-over-year in May, the same growth rate as in April (not seasonally adjusted).

Employment rose in wholesale and retail trade (+43,000; +1.5%) in May, driven by gains in wholesale trade. The increase partially offsets monthly declines in March and April 2025, totalling 55,000 (-1.8%).

In May, employment increased in information, culture and recreation (+19,000; +2.3%) and finance, insurance, real estate, rental and leasing (+12,000; +0.8%). Employment has increased in finance, insurance, real estate, rental and leasing since October 2024, with a net increase of 79,000 (+5.6%) over the period.

Meanwhile, public administration employment fell (-32,000; -2.5%), offsetting the increase in April that was related to temporary hiring for the federal election. Prior to these offsetting changes, there had been little change in public administration employment since July 2024.

Employment also declined in May in transportation and warehousing (-16,000; -1.4%); accommodation and food services (-16,000; -1.4%), and business, building and other support services (-15,000; -2.1%).

Bottom Line

US nonfarm payroll data were released this morning, showing a still resilient economy with tariffs beginning to leave their mark. The US added 139,000 jobs in May, exceeding estimates, while the jobless rate remained at 4.2%. A decline in the labour force participation rate kept the lid on May’s US unemployment rate. But the number of unemployed rose for a fourth month, the longest such streak since 2009. Payrolls for the prior two months were revised downward, and wage gains outstripped inflation, helping to boost consumer spending.

A number of other labour market indicators show signs of increasing stress. Household employment dropped by a whopping 696k in May as the labour force shrank by 625k. This kept the unemployment rate relatively stable at 4.244%, but it is hardly a sign of labour market strength and resilience.

Manufacturing employment dropped by 8k, the sector’s worst performance since January. Construction employment growth also slowed to 4k from 7k in April, which is unusual during the Spring home-selling season. There were also stinging net job losses coming from temporary help firms, retail trade, and the Federal government. These sectors likely feel the combined strain from tariffs and DOGE-driven Federal spending cuts.

Nothing in the May employment report will push the Fed off the sidelines earlier than the markets expect. The steady unemployment rate and improvement in the three-month average of monthly job gains will keep the Fed firmly in the wait-and-see camp. With that said, cracks in the façade of labour market resilience are now starting to show, and the longer the tariff uncertainty and government spending cuts continue, the worse the labour market reports are bound to be. Signs of net job loss in manufacturing, temporary help, retail trade, and government are tell-tale signs of that damage.

On the Canadian side, tariffs have already had a substantial effect on the labour market. The jobless rate is at its highest since 2016, excluding the pandemic, as industries impacted by tariffs are laying off workers. The doubling of the tariff on steel and aluminum is especially deleterious. Trade-related sectors are struggling, while domestic-facing industries are partially offsetting the damage.

The May jobs report could have been worse, given that it was burdened by the loss of more than 30,000 election workers. Any increase is welcome, and the gains in private-sector and full-time jobs are encouraging. The glaring issue is that the manufacturing sector is under intense strain amid the deep trade uncertainty, and the overall job market continues to soften, highlighted by the grinding rise in the unemployment rate. In over two years, the jobless rate has risen by two percentage points, as we have gone from 2022 to 2023, when it was difficult to find workers, to today, when it is difficult to find work. While May’s mixed report doesn’t give a clear-cut signal to the BoC, the bigger trend of a rising jobless rate will keep them in easing mode through the year’s second half.

Dr. Sherry Cooper
Chief Economist, Dominion Lending Centres

Finding your dream home can seem like a daunting task.

But don’t despair!

Here are five actionable steps to set you up for success:

1. Start with the Practicalities: First, figure out your finances. How much have you got saved for a downpayment, how much can you afford on a monthly basis, and what will you be able to qualify for? Download My Mortgage App and start running your numbers quickly and easily on your own time.
2. Set Yourself up for Success: If you want to find your dream home, you’ve got to figure out what that is. Make a list of needs and wants in your home, considering things like number of bedrooms, parking, your renovation skills and budget, etc. Also consider anything that would be a deal breaker. Share your requirements with your real estate agent before you start looking at properties. Keep in mind the more requirements you have, the longer your search might take, so be patient.
3. Visit the Area: The neighbourhood might be the most important factor in your home purchase, so be sure to go to the ones you’re considering living in. Check out what’s happening in the area like construction, gentrification, who’s there, amenities, etc. Try to meet some of your potential neighbours and get a feel of what they like and don’t like about what’s happening in the area. You may learn some info that won’t be available in a property listing which could sway your purchase decision, or even find out about properties that could be available to purchase but aren’t currently listed for sale.
4. Gather Information: Ask whatever questions you can about the house, like the history of repairs and upgrades, any outstanding leases or tenants, concerns with neighbours or the neighbourhood, traffic on the street, etc. Be sure to see the property in person at least twice and go at different times of the day so you get as complete a picture as you can of the home and its surroundings.
5. Sell Yourself: Consider that no one has to sell you their home. Writing a letter introducing yourself and explaining your intentions can set you apart from other offers and endear you to the seller. You might end up with more favourable purchase circumstances thanks to your effort. Also be sure to have your financing in order (I can get you a preapproval valid for 120 days) so you have fewer conditions on any offer you make.

When you’re ready to make a move, I’m here for you. Give me a call to help you with the practicalities of financing so you have a successful hunt for that dream home!

Many homeowners—especially those without a mortgage broker—don’t fully understand mortgage penalties. And I get it! Financing a home can be overwhelming. But if you’re considering refinancing, selling, making a lump sum payment, or need a way out, read this first.

The most common mortgage penalty my clients encounter is a prepayment penalty. Did you know? Your lender doesn’t want their money back early! That’s because they earn guaranteed interest on the loan, helping them not only budget but also profit. Let’s go over the types of prepayment penalties:

Prepayment or Overpayment: If you make a lump sum payment on your mortgage or increase the regular payments by too much, you could be outside the terms of your mortgage agreement.

Transferring: If you move your mortgage to another lender before the end of your term, that is considered breaking the mortgage agreement you made.

Early Re-Payment: If you sell your home and pay off your lender with the proceeds, leaving you without a mortgage, that also breaks the agreement.

Breaking your mortgage for these—or any other reason—almost always results in financial penalties. The amount of the penalty that could be owed will be based on a few factors:

• The amount of pre- or over-payment
• Interest rates (existing and new)
• The type of mortgage (open, closed) and the type of rate (fixed, variable)

How can you reduce or avoid prepayment fees?

The simplest answer is to wait until the end of your existing term to make changes. If that’s not possible, let’s review your circumstances:

• Do you have a fixed or variable rate? If you have a variable rate and you’re breaking the mortgage in favour of a fixed option, first check to see if you can lock in a rate under your existing terms
• Are you making a lump-sum payment? Review the terms of your mortgage to see what your annual prepayment allowance is. Most mortgages will let you make some fixed lump sum payments without any penalties

Penalties for non-payment

There’s also a flip side to penalties, which involves incurring a penalty because you’re making a late payment or missing payments.

You won’t be surprised that any payment received after the due date will incur a fee. Lenders will also report the missed payment to the credit bureau, which will impact your credit score. Before you miss a payment, the best thing you can do is to notify your lender (especially before it happens) and let them know. You can work together to defer a payment, skip a payment, or make other alternative arrangements.

If you’re with a lender that offers it, consider taking a ‘mortgage payment holiday’ and either skipping or deferring payments for a specific amount of time. Some lenders allow up to 3-6 months or possibly longer, depending on the circumstances.

If you have already missed a payment, you should make up that late or missed payment as soon as possible to avoid a quickly escalating situation.

When can penalties be worthwhile?

It is important to note that sometimes, paying a penalty can be worthwhile—especially if you’re locked into a higher-rate mortgage and the savings from breaking it and securing a lower rate outweigh the penalty costs. I can help you with this determination! I can help you determine if this makes financial sense for you.

An alternative to mortgage penalties

If you’re likely to break your mortgage agreement, consider an open mortgage. This is a great short-term solution for anyone who has an inheritance coming up, is planning a move out of town, or perhaps getting married (or divorced) and planning to combine (or separate) assets. You regularly pay the mortgage as long as you need it, but when you sell the property—no worries. This option does typically come with higher rates, but the benefit is that there are no penalties to pay it off at any time.

Whatever type of mortgage penalty you might be facing, my best recommendation is to talk to me for expert advice. Do this before you make any commitments so we can go over the fine print and you can understand what you’re getting into! I always take the time to do this with my clients, and I would be happy to assist you also.