Bank of Canada Rate Announcement Jun 5th, 2024

Tanya Toye • June 5, 2024

Bank of Canada reduces policy rate by 25 basis points.


FOR IMMEDIATE RELEASE

Media Relations

Ottawa, Ontario

June 5, 2024


The Bank of Canada today reduced its target for the overnight rate to 4¾%, with the Bank Rate at 5% and the deposit rate at 4¾%. The Bank is continuing its policy of balance sheet normalization.


The global economy grew by about 3% in the first quarter of 2024, broadly in line with the Bank’s April Monetary Policy Report (MPR) projection. In the United States, the economy expanded more slowly than was expected, as weakness in exports and inventories weighed on activity. Growth in private domestic demand remained strong but eased. In the euro area, activity picked up in the first quarter of 2024. China’s economy was also stronger in the first quarter, buoyed by exports and industrial production, although domestic demand remained weak. Inflation in most advanced economies continues to ease, although progress towards price stability is bumpy and is proceeding at different speeds across regions. Oil prices have averaged close to the MPR assumptions, and financial conditions are little changed since April.


In Canada, economic growth resumed in the first quarter of 2024 after stalling in the second half of last year. At 1.7%, first-quarter GDP growth was slower than forecast in the MPR. Weaker inventory investment dampened activity. Consumption growth was solid at about 3%, and business investment and housing activity also increased. Labour market data show businesses continue to hire, although employment has been growing at a slower pace than the working-age population. Wage pressures remain but look to be moderating gradually. Overall, recent data suggest the economy is still operating in excess supply.


CPI inflation eased further in April, to 2.7%. The Bank’s preferred measures of core inflation also slowed and three-month measures suggest continued downward momentum. Indicators of the breadth of price increases across components of the CPI have moved down further and are near their historical average. However, shelter price inflation remains high.


With continued evidence that underlying inflation is easing, Governing Council agreed that monetary policy no longer needs to be as restrictive and reduced the policy interest rate by 25 basis points. Recent data has increased our confidence that inflation will continue to move towards the 2% target. Nonetheless, risks to the inflation outlook remain. Governing Council is closely watching the evolution of core inflation and remains particularly focused on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behaviour. The Bank remains resolute in its commitment to restoring price stability for Canadians.


Information note

The next scheduled date for announcing the overnight rate target is July 24, 2024. The Bank will publish its next full outlook for the economy and inflation, including risks to the projection, in the MPR at the same time.


Tanya Toye

Mortgage Broker

GET STARTED
By Tanya Toye • September 30, 2026
When you apply for a mortgage, your employment history and status carry a lot of weight. Even if you feel secure in your job, lenders need proof that your income is reliable and will continue. To them, your employment status is one of the strongest indicators of whether you can make your mortgage payments long term. Here’s how lenders typically view different employment situations: Permanent Employment This is the gold standard. Once you’ve passed any probationary period and hold permanent status, lenders see you as a lower risk. It shows that your employer is committed to you, and your income is steady. Probationary Periods If you’re still on probation—usually 3 to 6 months, though sometimes longer—lenders may hesitate. That’s because your employer can end your contract without cause during this period. Once probation is over, you’re considered more secure. That said, context matters. If you’ve worked with the same company for years as a contractor and just transitioned into full-time employment, lenders may accept a letter from your employer confirming that probation is waived. Documentation is key here. Parental Leave Being on or about to take parental leave doesn’t mean you can’t qualify for a mortgage. As long as you have a letter from your employer guaranteeing your position and return-to-work date, lenders can use your regular salary—not your leave income—when assessing your application. Term Contracts This is one of the trickiest categories. Even highly skilled professionals with strong incomes can face challenges here. A term contract has a start and end date, which makes lenders question the stability of your future income. To use term-contract income, lenders generally want to see at least two years of history, or proof that your contract has already been renewed. The more evidence you can show of consistent employment, the stronger your case will be. The Bottom Line If you’re planning to apply for a mortgage, it’s important to understand how your employment status could affect your approval. Whether you’re starting a new job, coming back from leave, or working under contract, lenders want documentation that proves your income is reliable. 📞 If you’ve recently changed jobs or are planning a career shift, let’s connect. I can help you prepare your file so you qualify with confidence and avoid surprises in the approval process.
By Tanya Toye • September 29, 2026
Credit has traditionally been viewed as something you use for a specific purpose: buying a home, financing a major purchase or covering an unexpected expense. But with higher living costs, slower economic conditions and less financial flexibility, credit is increasingly becoming part of a longer-term financial conversation. That doesn’t mean taking on debt indefinitely or relying on borrowing to solve every financial challenge. But it’s important to understand the tools available and the necessity of making thoughtful decisions about when and how credit may fit into your broader financial plan. A Fresh Take on Credit In many ways, households are beginning to approach financial management with more of a business mindset. Businesses regularly evaluate cashflow, consider available sources of financing and balance immediate needs against longer-term objectives. They don’t necessarily borrow simply because credit is available. They consider why they need the funds, what the financing will cost and how it fits into their overall strategy. The same thinking can be useful for homeowners. When household budgets are under pressure, the question isn’t always, “How can I avoid using credit?” It may also be, “What options are available and do any of them make sense for my situation?” That could mean refinancing, consolidating certain debts, using a home equity line of credit or considering another form of financing. The appropriate option depends on your circumstances, objectives and ability to manage the associated costs.  Home Equity May Be Part of the Conversation For homeowners who have built significant equity, your home can represent an important financial resource. That’s one reason I’m seeing more openness to conversations about reverse mortgages. A reverse mortgage isn’t appropriate for everyone, and it shouldn’t be viewed as a simple solution to financial challenges. For the right homeowner and in the right circumstances, however, it may provide access to home equity and improve cashflow without requiring you to sell or move. The important thing is understanding how the option works, what it costs and how it affects your broader financial picture. Credit Requires Discipline Regardless of the type of credit being considered, having a plan is essential. Before taking on additional borrowing costs, it’s worthwhile understanding why you need the funds, how much is appropriate, the overall cost of borrowing and how your longer-term repayment or exit strategy looks. Credit can provide flexibility when financial circumstances are changing. But its value comes from using it intentionally and responsibly – as one part of a larger plan designed to support financial stability and resilience. The goal isn’t simply to borrow more – it’s to understand your options and make credit work within a financial strategy that makes sense for you. Let’s talk about how you may be able to leverage credit to your advantage. Contact Tanya: 604-788-8693 | tanya@tanyatoye.ca