Bank of Canada Rate Announcement Jun 4th, 2025

Marci Deane • June 4, 2025

Bank of Canada holds policy rate at 2¾%.

FOR IMMEDIATE RELEASE

June 4, 2025

The Bank of Canada today maintained its target for the overnight rate at 2.75%, with the Bank Rate at 3% and the deposit rate at 2.70%.

Since the April Monetary Policy Report, the US administration has continued to increase and decrease various tariffs. China and the United States have stepped back from extremely high tariffs and bilateral trade negotiations have begun with a number of countries. However, the outcomes of these negotiations are highly uncertain, tariff rates are well above their levels at the beginning of 2025, and new trade actions are still being threatened. Uncertainty remains high.

While the global economy has shown resilience in recent months, this partly reflects a temporary surge in activity to get ahead of tariffs. In the United States, domestic demand remained relatively strong but higher imports pulled down first-quarter GDP. US inflation has ticked down but remains above 2%, with the price effects of tariffs still to come. In Europe, economic growth has been supported by exports, while defence spending is set to increase. China’s economy has slowed as the effects of past fiscal support fade. More recently, high tariffs have begun to curtail Chinese exports to the US. Since the financial market turmoil in April, risk assets have largely recovered and volatility has diminished, although markets remain sensitive to US policy announcements. Oil prices have fluctuated but remain close to their levels at the time of the April MPR.

In Canada, economic growth in the first quarter came in at 2.2%, slightly stronger than the Bank had forecast, while the composition of GDP growth was largely as expected. The pull-forward of exports to the United States and inventory accumulation boosted activity, with final domestic demand roughly flat. Strong spending on machinery and equipment held up growth in business investment by more than expected. Consumption slowed from its very strong fourth-quarter pace, but continued to grow despite a large drop in consumer confidence. Housing activity was down, driven by a sharp contraction in resales. Government spending also declined. The labour market has weakened, particularly in trade-intensive sectors, and unemployment has risen to 6.9%. The economy is expected to be considerably weaker in the second quarter, with the strength in exports and inventories reversing and final domestic demand remaining subdued.

CPI inflation eased to 1.7% in April, as the elimination of the federal consumer carbon tax reduced inflation by 0.6 percentage points. Excluding taxes, inflation rose 2.3% in April, slightly stronger than the Bank had expected. The Bank’s preferred measures of core inflation, as well as other measures of underlying inflation, moved up. Recent surveys indicate that households continue to expect that tariffs will raise prices and many businesses say they intend to pass on the costs of higher tariffs. The Bank will be watching all these indicators closely to gauge how inflationary pressures are evolving.

With uncertainty about US tariffs still high, the Canadian economy softer but not sharply weaker, and some unexpected firmness in recent inflation data, Governing Council decided to hold the policy rate as we gain more information on US trade policy and its impacts. We will continue to assess the timing and strength of both the downward pressures on inflation from a weaker economy and the upward pressures on inflation from higher costs.

Governing Council is proceeding carefully, with particular attention to the risks and uncertainties facing the Canadian economy. These include: the extent to which higher US tariffs reduce demand for Canadian exports; how much this spills over into business investment, employment and household spending; how much and how quickly cost increases are passed on to consumer prices; and how inflation expectations evolve.

We are focused on ensuring that Canadians continue to have confidence in price stability through this period of global upheaval. We will support economic growth while ensuring inflation remains well controlled.

Information note

The next scheduled date for announcing the overnight rate target is July 30, 2025. The Bank will publish its next MPR at the same time.

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Can Foreign Buyers Still Purchase Property in BC

By Marci Dean • June 2, 2025

If you’re new to Canada, on a work permit, or simply curious about buying a home in British Columbia as a non-resident, you may have heard some conflicting info. Between federal bans and provincial taxes, it can feel like a maze. Let’s break it down – simply and clearly – so you know what’s actually possible. 🚫 The Federal Ban on Foreign Buyers (Until 2027) In early 2023, the Canadian government introduced a two-year ban on foreign nationals purchasing residential real estate. In 2024, that ban was extended until January 1, 2027 . ❗ Who’s affected: Foreign nationals who are not Canadian citizens or permanent residents Corporations and entities based outside of Canada ✅ Who’s exempt and can still buy: People on valid work permits (183+ days remaining at time of purchase) Certain international students (who’ve filed 5+ years of Canadian tax returns and are buying under $500K) Refugees or protected persons Those buying jointly with a Canadian spouse or partner 👉 Important : Even if you’re allowed to buy under federal rules, there are still provincial taxes to consider. The B.C. Foreign Buyer Tax (a.k.a. the Additional Property Transfer Tax) If you’re a foreign buyer and you’re purchasing property in designated parts of B.C. (including Metro Vancouver, Victoria, Fraser Valley, Kelowna, and Nanaimo), you’ll pay an extra 20% on top of the home’s price. Example: Buying a $1.2 million home as a non-exempt foreign buyer? Standard B.C. Property Transfer Tax: $22,000 Additional 20% Tax : $240,000 Total in taxes : $262,000 😬 Yep – that adds up fast. How to avoid the 20%: You may be exempt if: You’re a B.C. Provincial Nominee Program (PNP) participant buying your primary residence You’re a Canadian citizen or permanent resident You qualify for certain refunds after becoming a permanent resident within a year What Should You Do? If you’re on a work permit or navigating immigration pathways – you may still be able to buy , but it’s critical to understand the rules and the costs. As a mortgage broker, I’ve helped many newcomers figure out: If they’re eligible to buy What taxes apply (and how to reduce them!) What mortgage options are available Want the Full Breakdown? I’ve created a free, downloadable one-page Foreign Buyer Reference Guide with a full tax breakdown and clear examples. 📅 [Click here to download it now] Have questions about whether you can buy property in B.C.? Let’s chat. Ask Marci About Mortgages. ✅Honest advice. ✅ Clear answers. ✅ No confusion.

Big News for First-Time Home Buyers: GST Relief Is Here!

By Marci Deane • May 28, 2025

Buying your first home just got a little easier — and a lot less expensive — thanks to a major new government announcement made on May 27, 2025. If you're thinking about purchasing a newly built home or condo, here's what you need to know (in plain English). What’s the Big Change? The Government of Canada is introducing a new GST rebate just for First-Time Home Buyers (FTHB) : 100% GST rebate on new homes up to $1 million A partial GST rebate for homes between $1 million and $1.5 million No rebate for homes priced $1.5 million or more 💥 Translation: You could save up to $50,000 in taxes on a new build — serious money back in your pocket! What Types of Homes Qualify? The rebate applies to: New homes or condos purchased from a builder Owner-built homes (yep, if you're building yourself!) Co-op housing units (if you're buying shares in a housing co-op) Who Qualifies as a First-Time Buyer? You’re considered a First-Time Home Buyer if: You're 18 or older A Canadian citizen or permanent resident You (or your spouse/common-law partner) haven’t owned a home in the last 4 years — anywhere in the world When Does This Start? To qualify, your purchase contract signed or construction must start on or after May 27, 2025 , and: Construction must begin before 2031 Homes must be substantially completed before 2036 Buyers with contracts signed prior to May 27, 2025 will NOT qualify Some Fine Print You Should Know There are a few limits: You can only claim this once in your lifetime If your spouse or partner already used it , you can’t You won’t qualify if the original agreement to buy was signed before May 27, 2025 (Yes, I already said that but it bears repeating!!) It must be your primary residence Why This Is a Game Changer Let’s be real — saving up for a home is hard enough , especially in today’s market. This new GST rebate is a massive win for first-time buyers and a big push to get more homes built across Canada. ✔️ Less tax ✔️ More homes ✔️ A major step toward affordable ownership 📌 Want the Full Details? You can read the full government announcement right here . Need help understanding this or to get pre-approved, I am here to help. marci@askmarci.ca

How Employment Status Impacts Your Mortgage Application

By Marci Deane • May 28, 2025

Chances are if you’re applying for a mortgage, you feel confident about the state of your current employment or your ability to find a similar position if you need to. However, your actual employment status probably means more to the lender than you might think. You see, to a lender, your employment status is a strong indicator of your employer’s commitment to your continued employment. So, regardless of how you feel about your position, it’s what can be proven on paper that matters most. Let’s walk through some of the common ways lenders can look at employment status. Permanent Employment The gold star of employment. If your employer has made you a permanent employee, it means that your position is as secure as any position can be. When a lender sees permanent status (passed probation), it gives them the confidence that you’re valuable to the company and that they can rely on your income. Probationary Period Despite the quality of your job, if you’ve only been with the company for a short while, you’ll be required to prove that you’ve passed any probationary period. Although most probationary periods are typically 3-6 months, they can be longer. You might now even be aware that you’re under probation. The lender will want to make sure that you’re not under a probationary period because your employment can be terminated without any cause while under probation. Once you’ve made it through your initial evaluation, the lender will be more confident in your employment status. Now, it’s not the length of time with the employer that the lender is scrutinizing; instead, it’s the status of your probation. So if you’ve only been with a company for one month, but you’ve been working with them as a contractor for a few years, and they’re willing to waive the probationary period based on a previous relationship, that should give the lender all the confidence they need. We’ll have to get that documented. Parental Leave Suppose you’re currently on, planning to be on, or just about to be done a parental leave, regardless of the income you’re now collecting, as long as you have an employment letter that outlines your guaranteed return to work position (and date). In that case, you can use your return to work income to qualify on your mortgage application. It’s not the parental leave that the lender has issues with; it’s the ability you have to return to the position you left. Term Contracts Term contracts are hands down the most ambiguous and misunderstood employment status as it’s usually well-qualified and educated individuals who are working excellent jobs with no documented proof of future employment. A term contract indicates that you have a start date and an end date, and you are paid a specific amount for that specified amount of time. Unfortunately, the lack of stability here is not a lot for a lender to go on when evaluating your long-term ability to repay your mortgage. So to qualify income on a term contract, you want to establish the income you’ve received for at least two years. However, sometimes lenders like to see that your contract has been renewed at least once before considering it as income towards your mortgage application. In summary If you’ve recently changed jobs or are thinking about making a career change, and qualifying for a mortgage is on the horizon, or if you have any questions at all, please connect anytime. We can work through the details together and make sure you have a plan in place. It would be a pleasure to work with you!