November 23, 2020, by Shelly Hagan

Deputy Governor Toni Gravelle said in remarks via video conference to the Autorite des marches financiers that the signs of overwhelming financial strain are few, the risk of a wave of consumer defaults seems low and almost all of the households with expired debt deferrals have resumed repayments.

He also downplayed signs of overheating in the nation’s housing market, hinting the recent surge in prices reflects fundamental factors such as pent-up demand and a shift in preferences to larger homes. 

“To this point, we do not see signs that home prices are rising due to speculation like we saw in the greater Toronto and Vancouver areas a few years ago,” he said. At the same time, he cautioned about the need to be vigilant in certain segments of the market such as condos.

Gravelle added, however, that it’s too soon to declare victory, in particular, because many mortgage deferrals only ended in October, meaning the full effects may not be known until the end of the year or early 2021.

Bank of Canada deputy downplays risks of consumer default wave

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