(Windsor) A senior Bank of Canada executive has warned that the recent increase in newcomers has pushed up rent and house prices, adding to pressure on inflation.
In the text of a speech in Windsor, Ontario, Deputy Governor Toni Gravelle said that while increased immigration contributes to the growth of the country’s economy and workforce, it also fueled inflation through demand for housing.
Mr. Gravelle told the Windsor-Essex Regional Chamber of Commerce that rent inflation continues in Canada while it declines in the United States, in part because housing construction south of the border has always adapted more quickly to demographic changes.
The deputy governor warned all levels of government that they must work together to reduce barriers to building new housing, otherwise rents and home prices could continue to rise.
Canada has seen strong population growth over the past two years as the federal government pursues more ambitious immigration goals and allows more temporary residents to enter the country.
The Bank of Canada kept its key interest rate at 5% on Wednesday, but warned it was prepared to raise rates if necessary in its fight against inflation.
