Canada

Canada’s house prices increasing again

Lalaine C. Delmendo

Canada’s house prices are increasing again, despite the continued decline in both residential property sales transactions and weak construction activity.

In Q1 2024, house prices in Canada’s eleven major cities rose by 4.51% as compared to a year earlier, in sharp contrast to the prior year’s 4.62% fall, according to figures from Teranet – National Bank of Canada. When adjusted for inflation, house prices increased by 1.56% y-o-y in Q1 2024.

“The market has been showing some early signs of life over the last couple of months, probably no surprise given how much pent-up demand is out there,” said CREA Chair Larry Cerqua. “There’s a consensus that the market will probably look quite a bit different this year compared to 2022 and 2023.”

All of the country’s eleven major cities saw a house price growth during the year to Q1 2024. Calgary recorded the biggest house price increase of 11.7% y-o-y in Q1 2024, followed by Quebec (10%), and Halifax (8.4%). Modest house price growth was seen in Montreal (4.4%), Vancouver (4.3%), Hamilton (4%), Toronto (3.9%), Ottawa (3.6%), Victoria (3.6%), and Winnipeg (3%). Edmonton registered the lowest price growth of just 1.9%.

Yet quarter-on-quarter, nationwide house prices fell slightly by 0.42% (-1.35% inflation-adjusted) during the latest quarter.

Canada’s house price annual change

Figures from the Canadian Real Estate Association (CREA) are more subdued, with the actual national average sales price increasing slightly by 1.1% in Q1 2024 from a year earlier (but declined by 1.7% in real terms).

By property type:

  • One-story single-family home prices rose on average by 2.4% y-o-y in Q1 2024 (fell slightly by 0.5% inflation-adjusted).
  • Two-story single-family home prices increased 1.8% y-o-y in Q1 2024 (-1.1% inflation-adjusted).
  • Townhouse prices were up by 1.2%, on average, over the same period (-1.6% inflation-adjusted).
  • Apartment prices increased by 1.3 y-o-y in Q1 2024 but fell by 1.5% when adjusted for inflation.

The national average home price stood at CA$ 718,400 (US$520,599) in Q1 2024, according to CREA. British Columbia and Ontario had the most expensive housing markets in the country, with average prices of CA$ 996,400 (US$700,315) and CA$ 867,900 (US$628,936), respectively.

Both demand and supply continue to fall. During 2023, the total number of residential property sales transactions fell by 11.2% y-o-y to 445,514 units, following a huge decline of 25.1% in 2022, according to figures from CREA.

Likewise, the total number of dwelling starts in Canada (Centres 10K+ population and over) fell by 7% y-o-y to 223,513 units in 2023, following a 1.5% decline in 2022, according to data released by the CMHC. Dwelling completions also fell by 4.3% to 188,689 units in 2023 from a year ago, following a decline of 2.6% in 2022.

Canada experienced an economic slowdown last year, registering a real GDP growth of a meager 1.2%, down from expansions of 3.4% in 2022 and 5% in 2021, according to Statistics Canada. Excluding the pandemic year of 2020, last year’s growth is the slowest pace since 2016, as economic activity slowed due to market pressures caused by high-interest rates, which was aggravated further by the adverse effects of forest fires, drought, and strikes.

Overall economic conditions are expected to gradually improve. The Bank of Canada forecasts real GDP growth of 1.5% this year and another 2.2% in 2025.

A long and steady boom

Canadian house prices have risen almost continuously for two decades:

  • From Q1 2000 to Q1 2009, house prices rose by 79% (49% inflation-adjusted), due to low interest rates and economic growth.
  • From Q2 2009 to Q3 2012, house prices increased by another 24% (17% inflation-adjusted), despite government efforts to cool the housing market.
  • From Q4 2012 to Q4 2015, tighter mortgage rules implemented in July 2012 helped calm the market, but house prices still rose by around 15.7% (10.8% inflation-adjusted).
  • From 2016 to 2020, house prices surged by almost 40% (28.7% inflation-adjusted).
  • During 2021, house prices surged by 15.64% (10.34% inflation-adjusted).
  • House price growth slowed sharply to just 2.5% in 2022, and declined by 3.59% when adjusted for inflation.
  • During 2023, house price growth remained modest at 2.91%, but declined slightly by 0.47% in real terms.

Canada House Price Index graph

Housing market outlook improving

Canada’s housing market is expected to improve this year, as the central bank is projected to have its first rate cut in the second half of this year.

“Many Canadian housing markets have been quiet since the Bank of Canada’s summer rate hikes last year. Interest rates have been the major factor affecting markets over the last few years, and this is expected to continue to be the case in 2024 and 2025,” said CREA in its April 2024 Quarterly Forecasts. “Expectations around the timing of the first rate cut in 2024 seem to have solidified to the second half of the year, and financial markets are currently pricing in about 50 basis points of cuts by the end of 2024.”

The national average house price is forecast to increase by 4.9% y-o-y to CA$ 710,468 (US$514,851) during 2024. This is supported by a projected increase in the number of residential property transactions by 10.5% y-o-y to 492,083 units this year.

Regionally:

  • Alberta is expected to post the biggest annual growth in house prices of 7% during 2024, to an average of CA$ 479,765 (US$347,668).
  • House prices are also projected to increase by 6.9% in British Columbia, and will remain the most expensive housing market in Canada, with an average price of CA$ 1,037,382 (US$751,753).
  • House prices are also expected to increase in Nova Scotia (6.7%), Quebec (5.9%), Newfoundland (5.2%), New Brunswick (5%), and Manitoba (4%).
  • Modest to minimal house price increases are projected to be seen in Prince Edward Island (2.5%), Ontario (2.4%), and Saskatchewan (2.1%).

Home sales remain weak

During 2023, the total number of residential property sales transactions fell by 11.2% y-o-y to 445,514 units, following a huge decline of 25.1% in 2022, according to figures from CREA. This was in sharp contrast to annual increases of 20.9% in 2021, 12.4% in 2020, and 6.5% in 2019.

All regions saw a decline in demand last year. Nova Scotia registered the biggest y-o-y fall of 17.3% in 2023, followed by Newfoundland (-15.1%), New Brunswick (-13.6%), Quebec (-12.8%), Ontario (-12.4%), and Manitoba (-10%). Sales also fell in British Columbia (-9.2%), Alberta (-9.1%), Prince Edward Island (-5.4%), and Saskatchewan (-3.3%).

CREA projects sales activity to increase by 10.5% y-o-y to 492,083 units this year and by another 7.8% to 530,484 units in 2025.

However, actual figures show that activity remains more or less steady. In March 2024, actual sales activity increased slightly by 1.7% as compared to the same month last year.

“While there are expectations the Canadian housing market will pick up on some level this year, home sales and prices were mostly unchanged on a month-over-month basis in March 2024,” said CREA.

“We’ll have to wait for the April data to really understand how buyers are responding to all these new properties for sale, but if you look at last spring as a guide and add to that record population growth in the last year and a central bank that is far more likely to cut this summer than raise like it did last year, it could get interesting,” said Shaun Cathcart, CREA’s Senior Economist. “Will the story be high-interest rates keeping a lot of people on the sidelines this year, or the much expected and anticipated first rate cuts enticing a lot of people back into the market? Probably a bit of both.”

Canada Number of Residential Property Sales graph

New listings continue to fall

The total number of newly listed homes fell by 1.6% in March 2024 from the previous month, according to CREA.

As a result, the national sales-to-new listings ratio tightened to 57.4% in March 2024, as compared to the long-term average ratio of 55%. A sales-to-new listings ratio between 45% and 65% is generally consistent with balanced housing market conditions, with readings above and below this range indicating sellers and buyers’ markets respectively.

There were 3.8 months of inventory in March 2024, unchanged from the previous month but down from 4.2 months of inventory by the end of 2023. The long-term average is about 5 months of inventory.

Residential construction activity slowing

During 2023, the total number of dwelling starts in Canada (Centres 10K+ population and over) fell by 7% y-o-y to 223,513 units, following a 1.5% decline in 2022, according to data released by the CMHC. Yet it remains one of the highest dwelling starts recorded in recent history.

“Following record and near-record highs in 2021 and 2022, housing starts dipped in 2023, but still significantly outperformed expectations for the year. The decline was driven mainly by a sharp drop-off in single-detached starts and tighter economic conditions affecting multi-unit starts in the year’s final quarter,” said Bob Dugan, CMHC’s Chief Economist.

“The recent monthly multi-unit volatility is not surprising as we’re now starting to see 2023’s challenging borrowing conditions and labor shortages in the housing starts numbers and we expect to see continued downward pressure in the coming months,” Dugan added.

By property type:

  • Apartments: starts were up by a modest 4.7% to 150,988 units in 2023 as compared to a year earlier, after increasing by 1.7% in 2022
  • Single-family homes: starts fell by 5.1% y-o-y to 54,616 units last year, following a contraction of 9.3% in 2022
  • Semi-detached houses: starts were down by 8.5% y-o-y to 9,440 units in 2023, after falling by 11.2% in the prior year
  • Row houses: starts fell by 11.7% y-o-y to 25,223 units last year, in contrast to an annual increase of 4.5% in 2022

Ontario accounted for more than 37% of all dwelling starts in Canada during 2023, followed by British Columbia, which represented about 21% share, Quebec with 16.2% share, and Alberta with 15% share.

Likewise, dwelling completions in Canada (Centres 10K+ population and over) fell by 4.3% to 188,689 units in 2023 from a year ago, following a decline of 2.6% in 2022.

By property type:

  • Apartments: completions increased 1.6% y-o-y to 113,196 units last year, after declining by 1.3% in 2022
  • Single-family homes: completions plunged by 18.3% to 43,967 units in 2023 from a year earlier, following an annual fall of 3% in 2022
  • Semi-detached houses: completions fell sharply by 20.9% y-o-y to 7,906 units in 2023, after declining by 7.1% in the prior year
  • Row houses: completions were up by 7.7% y-o-y to 23,620 units in 2023, in contrast to a fall of 5.9% in 2022

Canada Dwelling Starts and Completions graph

Interest rates rising rapidly

Mortgage interest rates are rising rapidly in Canada, following the central bank’s successive rate hikes in the past two years or so.

  • Interest rates on 1-year mortgages stood at 7.84% by the end of March 2024, up from 6.29% in the previous year and 2.99% two years ago, according to figures from Bank of Canada.
  • Interest rates on 3-year mortgages averaged 6.99% in March 2024, higher than the 6.14% in March 2023 and 3.69% in March 2022.
  • Interest rates on 5-year mortgages averaged 6.84% in March 2024, up from 6.49% a year earlier and 4.79% two years ago.

In April 2024, the Bank of Canada held its key interest rate unchanged at 5%, following ten consecutive rate hikes since March 2022 when the key rate was just 0.25%, to curb high inflation. The central bank also kept its bank rate and deposit rate unchanged, at 5.25% and 5%, respectively. Additionally, the central bank said that it is continuing its policy of quantitative tightening.

“Based on the outlook, Governing Council decided to hold the policy rate at 5% and to continue to normalize the Bank’s balance sheet. While inflation is still too high and risks remain, CPI and core inflation have eased further in recent months. The Council will be looking for evidence that this downward momentum is sustained,” said the central bank.

“The Bank remains resolute in its commitment to restoring price stability for Canadians,” the bank added.

Canada Interest Rates graph

Mortgage market growth slowing

As a result, the mortgage market continues to expand, albeit at a slower pace. In February 2024, the total amount of outstanding residential mortgage loans rose by a modest 3.4% to CA$ 2.16 trillion (US$1.57 trillion) as compared to the same period last year, according to figures from Statistics Canada. This followed annual increases of 7.2% in 2023, 10.6% in 2022, and 7.4% in 2021.

The size of the mortgage market expanded strongly in recent years, rising from 39.7% of GDP in 2000, to 54.1% of GDP in 2008, to 63.1% of GDP in 2014, and finally to a peak of nearly 80% of GDP in 2020. The size of the market fell back to about 77.5% of GDP in 2021 and to 75.9% of GDP in 2023.

In 2019, the government launched its First-Time Home Buyer Incentive which aims at helping first-time homebuyers reduce their monthly mortgage payments without adding to their financial burdens. Under the CA$ 1.25 billion (US$ 0.91 billion) shared equity program, the government contributes a portion of the home purchase price in exchange for an equity share of the home’s value.

However due to low uptake since its inception, the CMHC announced recently that the First-Time Home Buyer Incentive is no longer accepting applications and will be discontinued. Accordingly, no new approvals will be granted after March 31, 2024.

Canada Total Outstanding Residential Mortgages graph

New market-cooling measures

Last year, the government announced that it is taking new steps to increase housing supply in Canada. Some of these measures include:

  • Discouraging homeowners from turning apartments and condos into short-term rentals for tourists;
  • Removing the GST from construction of eligible new co-op rental housing; and,
  • Working with municipalities to address the problems for new builds and making affordable housing construction more attractive to developers.

Moreover, the government unveiled a CA$1 billion (US$725 million) budget to encourage the construction of about 7,000 affordable non-profit, co-op, and public housing homes in the next five years.

“Our government really understands that housing is an urgent concern of Canadians, and housing is so connected to affordability for Canadians,” said Finance Minister Chrystia Freeland.

Starting this year, Ottawa will also make CA$15 billion (US$10.9 billion) available in new loan funding under the Apartment Construction Loan Program, which aims to stimulate the construction of affordable homes. The said program targets to deliver 101,000 new homes by 2031-32.

In early 2023, the Office of the Superintendent of Financial Institutions (OSFI) proposed tougher lending rules that would make it even harder for borrowers to get a mortgage, after a surge in borrowing costs increased risks to the banking system. These include:

  • Limiting the share of highly leveraged borrowers in a bank’s mortgage portfolio;
  • Toughening debt servicing metrics; and,
  • Augmenting the mortgage stress test for risky loans.

Before this, the country tightened lending rules for riskier mortgage products in June 2022, to address concern over high levels of mortgage debt driven by record-low interest rates during the Covid-19 pandemic, leaving the country more vulnerable to economic shocks.

In October 2022, Ontario’s provincial government raised further its non-resident speculation tax for foreign property buyers to 25%, making it the highest in the country, as it seeks to discourage foreign speculative buying. Ontario had previously increased the tax from 15% to 20% in March 2022 and expanded its coverage to include the whole, instead of just the Greater Golden Horseshoe area of southern Ontario.

Foreign speculative buyers were partly blamed for surging house prices in Vancouver and Toronto in recent years, prompting British Columbia and Ontario to impose land transfer taxes on foreign buyers in some markets.

Aside from these, the Canadian government introduced several rounds of market cooling measures in recent years. In October 2017, the OSFI required lenders to test borrowers’ ability to pay higher interest rates than the one they have been offered. The measures, which came into effect on January 1, 2018, apply to all federally regulated financial institutions.

  • OSFI set a minimum qualifying rate, or “stress test,” for uninsured mortgages. The minimum qualifying rate is now the five-year benchmark rate published by the Bank of Canada or the contractual mortgage rate +2%, whichever is higher.
  • OSFI required lenders to enhance their loan-to-value (LTV) measurement and limits so they would be dynamic and responsive to risk.
  • OSFI placed restrictions on certain lending arrangements that are designed to circumvent LTV limits.

This followed measures introduced in 2016 to discourage speculation:

  • From August 2, 2016, foreign nationals and foreign-controlled companies were required to pay 15% in additional property transfer tax on residential property transfers in Greater Vancouver. A 15% tax is equivalent to around CA$ 300,000 on the sale of a CA$ 2 million home.
  • From October 17, 2016 homebuyers who made greater than 20% down payments faced the same insurance requirements as those with lower down payments.
  • The government has also launched consultations on limiting the government’s financial obligations in the event of widespread mortgage defaults.

Other market-tightening measures date back to July 2012, with a significant ratcheting-up of pressure in 2013 and 2014.

Rent-to-own program and other rental measures

Canadian Prime Minister Justin Trudeau, who won his third term in September 2021, announced two years ago that the rent-to-own program will continue, as he set out a CA$ 2 billion (US$ 1.45 billion) budget to improve housing affordability and double the pace of homebuilding in the country over the next decade. The new rent-to-own program aims to help Canadians transition from renting to buying their first home.

“For a lot of renters, saving to buy a home is increasingly difficult. Through this new program we’ll work with housing providers to help families go from renting to owning their home,” said Trudeau.

Aside from the rent-to-own program, the funding will also be used to build about 17,000 new homes across the country, particularly affordable and market-rate housing projects.

Then in early April 2024, Trudeau unveiled a new CA$ 1.5 billion (US$1.1 billion) housing fund that will help non-profit organizations acquire more rental units across the country to ensure affordable rental housing.

“They recognize that for every new affordable rental home that is built in their province, four more are lost to investors, to conversions, to demolition, and to rent increases,” Trudeau said. “And this is happening in communities right across the country.”

In addition, Trudeau also proposed other reforms that will address the housing affordability crisis in Canada. These measures include an amendment to the Canadian Mortgage Charter to allow tenants to count on-time rent payments toward their credit score, and a new Canadian Renters’ Bill of Rights that will require landlords to disclose the history of the property’s pricing so renters can bargain fairly.

“It’s too hard to find an affordable place to rent, especially for younger Canadians. That’s why in Budget 2024, we’re taking action to protect renters, make the rental market fairer, and open new pathways for renters to become homeowners,” Trudeau said.

Rents continue to rise strongly

During 2023, residential rents in Canada rose by 8.4% y-o-y to an average of CA$ 1,307 (US$947), according to figures from the CMHC. It was an acceleration from a growth of 7.3% in 2022 and an average annual increase of 3.1% in 2011-21. It was the highest growth recorded in the past three decades.

By no. of bedroom (based on CMHC data):

  • Bachelor: monthly average rent rose by 7.4% y-o-y to CA$ 1,019 (US$738) during 2023, following an increase of 7% in 2022
  • One-bedroom: monthly rent increased by 8.7% to CA$ 1,247 (US$904) in 2023 from a year earlier, after increasing by 7.1% in 2022
  • Two-bedroom: monthly rent increased by 8% y-o-y to an average of CA$ 1,359 (US$985) in 2023, after rising by 7.8% in the prior year
  • Three or more bedrooms: monthly average rent was up by 6.8% y-o-y to CA$ 1,443 (US$ 1,046) last year, after rising by 7.1% in 2022

Canada Monthly Average Residential Rents graph

This is supported by figures from Rentals.ca, which showed that the average listed rent for all property types rose strongly by 8.8% y-o-y to CA$ 2,181 (US$ 1,580) in March 2024. For the full year of 2023, the nationwide rents increased by 8.6%, following growth of 12.1% in 2022 and 4.6% in 2021.

By property type, in March 2024:

  • Apartments: monthly rent rose strongly by 12.7% y-o-y to CA$ 2,117 (US$ 1,534).
  • Condominiums: rents increased by a modest 3.9% y-o-y to an average of CA$ 2,321 (US$ 1,682)
  • Houses/Townhouses: monthly rents rose by 4.5% y-o-y to an average of CA$ 2,315 (US$ 1,678)

British Columbia and Ontario had the highest rents in Canada in March 2024, with an average monthly rent of CA$ 2,494 (US$1,807) and CA$ 2,410 (US$1,746), respectively, according to Rentals.ca.

There were 2,227,134 private apartment units in Canada in 2023, up by 1.7% from a year earlier, according to CMHC.

Rental yields remain reasonable

Rental returns on apartments in Toronto tend to outpace those in Montreal. Montreal yields range from 2.15% to 5.29% with an average of 4.17%, according to Global Property Guide research. Whereas in Toronto, the yields fall between 2.77% and 7.64% with an average of 4.49%. In this low-return era, in a low-risk country such as Canada, that is an acceptable yield.

In Vancouver, gross rental yields are lower, at between 2.96%% to 3.71%. Taking account of the fact that we give gross figures - a guess might be that net yields would be around 2% or lower.

Hamilton produces yields between 3.94% to 4.98%. Ottawa yields are the strongest with 4.57% to 5.63%. Calgary yields are between 2.93% and 6.11%, with an average of 4.92%.

Vacancy rate fell to record-low

During 2023, Canada’s vacancy rate for private apartments dropped to 1.5%, sharply down from 1.9% in 2022, 3.1% in 2021, 3.2% in 2020, 2.2% in 2019, and 2.4% in 2018, according to CMHC. It was the lowest vacancy rate ever recorded.

By no. of bedrooms:

  • Bachelor: 2% in 2023, down from 2.6% in 2022, 5.3% in 2021, 4.6% in 2020, 3% in 2019 and 2.9% in 2018
  • One-bedroom: 1.6% in 2023, lower than the 2% in 2022, 3.8% in 2021, 3.5% in 2020, 2.3% in 2019 and 2.4% in 2018
  • Two-bedroom: 1.5% in 2023, down from 1.8% in 2022, 2.6% in 2021, 2.8% in 2020, 2.2% in 2019 and 2.4% in 2018
  • Three bedrooms or more: 1.2% in 2023, down from 1.6% in 2022, 2% in 2021, 2.6% in 2020, 1.5% in 2019 and 1.8% in 2018

“In most major markets across Canada, strong rental demand outpaced supply for the second year in a row, resulting in less available purpose-built rental apartments and lower affordability in Canada’s primary rental market,” said CMHC in its latest Rental Market Report.

“As a result, the national vacancy rate for Canada’s primary rental market reached a new low of 1.5% in 2023, the lowest recorded rate since 1988, when CMHC began recording a national vacancy rate,” added CMHC.

According to CMHC, the primary factors that led to the increase in rental housing demand are:

  • Higher immigration and net migration
  • More expensive homeownership
  • Students returning to on-campus learning in several census metropolitan areas

Canada Rental Vacancy Rates graph

Immigrants to Canada reach new record high

In an effort to fill the gap left by retiring baby boomers, Canada liberalized its immigration regulations in 2015. As a result, Canada took in more than 323,000 immigrants in the 2015-16 fiscal year, the largest number since 1910, according to Statistics Canada. In 2019, the Canadian government welcomed 341,180 immigrants, after admitting 321,055 newcomers in 2018 and 286,510 immigrants in 2017.

However, due to the COVID-19 outbreak and the imposition of travel restrictions and lockdowns, the government’s plan of welcoming about 340,000 new immigrants in 2020 was not achieved.

Despite the ongoing pandemic, Sean Fraser, the Minister of Immigration, Refugees, and Citizenship, announced recently that Canada welcomed more than 401,000 new permanent residents in 2021 - surpassing the previous record from 1913. Then in 2022, the total number of immigrants in the country reached 437,600 people.

During 2023, the country welcomed another 471,550 new permanent residents – up by 7.8% from a year earlier and the largest number of people ever welcomed in a year in Canada’s history, according to the Immigration, Refugees, and Citizenship Canada (IRCC). It exceeded its target for 2023 in the Immigration Levels Plan 2023-2025 of 456,000 permanent residents this year.

The Canadian government targets about 485,000 newcomers this year and 500,000 annually in 2025 and 2026.

About five million Canadians are set to retire by 2035.

IMMIGRATION LEVELS PLAN
Immigration Class 2024 2025 2026
Economic 281,135 301,250 301,250
Family 114,000 118,000 118,000
Refugee 76,115 72,750 72,750
Humanitarian 13,750 8,000 8,000
Total 485,000 500,000 500,000
Source: Canadavisa.com

Economy slowing, labor market conditions easing

Canada experienced an economic slowdown last year, registering a real GDP growth of a meager 1.2%, down from expansions of 3.4% in 2022 and 5% in 2021, according to Statistics Canada. Excluding the pandemic year of 2020, last year’s growth is the slowest pace since 2016, as economic activity slowed due to market pressures caused by high-interest rates, which was aggravated further by the adverse effects of forest fires, drought, and strikes.

Overall economic conditions are expected to gradually improve. The Bank of Canada forecasts real GDP growth of 1.5% this year and another 2.2% in 2025.

“Economic growth is forecast to pick up in 2024. This largely reflects both strong population growth and a recovery in spending by households,” said the central bank. “Residential investment is strengthening, responding to continued robust demand for housing. The contribution to growth from spending by governments has also increased. Business investment is projected to recover gradually after considerable weakness in the second half of last year. The Bank expects exports to continue to grow solidly through 2024.”

Canada GDP Growth and Inflation graph

The federal government posted a budget deficit of about CA$40.1 billion (US$29.1 billion) in the fiscal year 2023-24, down from a shortfall of CA$35.3 billion (US$25.6 billion) in 2022-23, but still far lower than the deficit of CA$90.2 billion (US$65.4 billion) in 2021-22 and a whopping CA$327.7 billion (US$237.5 billion) in 2020-21.

As a percent of GDP, the deficit was equivalent to about 1.1% in 2023, down from 1.3% in 2022, 3.6% in 2021, and 14.8% in 2020.

The general government gross debt was estimated to have fallen to about 104% of GDP in 2023, down from 107% in 2022, 112.8% in 2021, and 117.8% in 2020, based on IMF figures. However, it remains far above the average gross debt of about 86% of GDP in 2009-19.

The Canadian dollar (CAD) depreciated against the US dollar by more than 7% in the past three years, to reach an average monthly exchange rate of CAD 1.3539 = USD 1 in March 2024.

Canada Monthly Average Exchange Rate graph

The country’s annual inflation rate stood at 2.9% in March 2024, slightly up from 2.8% in the prior month but still far below the previous year’s 4.3%, according to Statistics Canada. From an average of just 1.8% from 2011 to 2021, inflation surged to a four-decade high of 8.1% in June 2022. Inflation has been generally falling since, thanks to the Bank of Canada’s aggressive campaign to rein in inflationary pressures.

The labour market seems weakening. In March 2024, the nationwide unemployment rate increased to 6.1%, from 5.8% in the previous month and 5.1% in the same period last year, according to figures from Statistics Canada. The jobless rate reached a record-high of 14.1% in May 2020, amidst the Covid-19 pandemic.

There were about 1,320,300 unemployed people in Canada in March 2024, up by 246,900 jobless people when compared to a year earlier.

“A broad range of indicators suggest that labor market conditions continue to ease. Employment has been growing more slowly than the working-age population and the unemployment rate has risen gradually, reaching 6.1% in March. There are some recent signs that wage pressures are moderating,” said the Bank of Canada.

Canada Unemployment Rate graph

Sources:

Canada - More data and information