Bank of Canada Admits Housing Affordability Fix Elusive Despite Rate Cuts
A senior official at the Bank of Canada has spoken out about the limitations of monetary policy in addressing housing affordability challenges. Carolyn Rogers, Senior Deputy Governor, delivered a speech in Victoria, B.C., on October 1, 2026, where she highlighted the complexities involved in balancing housing markets with economic stability.
Rogers noted that while lower home prices have provided relief to buyers in some markets, prolonged declines can have negative effects on household wealth and investor confidence. The Bank of Canada's key interest rate is seen as 'too blunt' a tool for addressing housing affordability alone, as lower rates can fuel rising prices while higher borrowing costs exclude prospective buyers.
The mortgage stress test has been implemented to maintain stability in the housing market, but Rogers argues that it has also created barriers to buying a home. To restore housing affordability, a mix of policies is needed to boost supply and reduce reliance on perpetually rising home prices.