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The month's significant number: 9 - DFSIN - SFL

This month’s significant number: 9

That’s the number of times the Bank of Canada has raised its policy rate since March 2022.

June 20, 2023

On June 7, the Bank of Canada raised its policy rate to 4.75%, an increase of 0.25% above the rate of 4.5% that had been in place since January 2023. This was the ninth rate increase since the central bank instituted its quantitative tightening policy in March 2022. 

The policy rate has an impact on the interest rates that apply to many types of borrowing, including mortgages and lines of credit. On the other hand, it also influences the interest rates paid by savings products such as deposits and guaranteed investment certificates. 

This latest increase is likely to affect many Canadians. Canada’s household debt level is the highest of any G7 country and consists largely of mortgage loans, according to the Canada Mortgage and Housing Corporation (CMHC). Moreover, a recent Angus Reid poll revealed that the number of owners having a tough time paying their mortgage was up by 11% in the past year. About 45% of mortgage holders are now in this situation. Renters are also having more difficulty, with 54% reporting that they have trouble paying their rent, and 24% of these saying that this is very difficult – 5% more than a year ago. If you are facing this challenge, don’t hesitate to talk to your advisor, who can help you find the right solutions.