A recession is not the most likely scenario, says Girard

A recession is not the most likely scenario, says Girard

UPDATE DAY

Finance Minister Eric Girard still does not fear a recession, despite persistent inflation and the Bank of Canada's helm on Wednesday. For the first time since 1998, the organization raised its key rate by 1%. 

“The most likely scenario, as stated by the Bank of Canada, remains a significant slowdown in growth in 2023 without recession,” argued the office of the Minister of Finance.

By setting its key rate at 2.5% with a fourth increase since last March, the objective of the Bank of Canada is precisely to limit the effects of inflation, including the meteoric rise in real estate prices.

“The increase in the key rate aims to reduce overall demand, in particular by moderating the effervescence of the real estate market,” recalled Mr. Girard's cabinet.

First-time buyers< /p>

However, the direct effect of this increase will be a substantial increase in commercial bank interest rates.

A recession is not the most likely scenario, says Girard< /p>

A recession is not the most likely scenario, believes Girard

This will make it more difficult for those who have taken out mortgages to pay their bills at the end of the month, and for first-time buyers to struggle more obtain a loan.

Faced with the concerns raised by this situation, the office of the Minister of Finance recalls that the government has “already implemented several measures to protect first-time buyers and promote access to property,” such as harmonizing its first-time homebuyer programs with federal government programs.

Last June r, Quebec has also improved the tax credit provided for the purchase of a first home, increasing it from $750 to a maximum amount of $1,500.