Canadian Macro Update

🇨🇦 Jan inflation down to 5.9%.

Why is the price still high up there?

Inflation measures the speed of price increases. The drop of inflation means the price grows slower, but it is still going up.

Thus It is “Disinflation”, not “Deflation”.

Don’t expect the price to back down.

📌 Except for housing, the sharply rising interest rate has burst the bubble.

Jan housing index down 15% vs. the peak in Feb ‘22. Many call the price to drop further in 2023.

📌 The up and down of housing prices is all paper wealth, if you don’t move and sell your property.

However, the rising monthly mortgage payment is real. Canadian mortgage terms are 5 years or shorter. 1.1 million mortgages will renew and face higher payment in 2023.

📌 The shortage of healthcare resources is more serious post the pandemic. Even Canadians are more open to private care deliveries.

With less percentage of the working age population, the public funded system faces challenges globally.

📌 That is why Canada continues its immigration policy. However, the support systems need to be in sync.

The CIBC CEO called out the challenges from housing, and healthcare, to skill recognition to integrate the new population.

The future is always bright. The road is winding.