Time for your cheat sheet on this week’s top stories.
Canadian Real Estate
Canada’s Public Spending Spree Means Higher Mortgages For Longer
A new National Bank of Canada (NBC) report confirms what most already know—government spending is spiralling. Government “investment” has grown at 3.5% annually over the past three years, over double the 1.7% rate of overall GDP. Spending now represents over 25% of GDP, a threshold previously reserved for recessions, and NBC warns it won’t be consequence-free. This creates yield pressure and credit crowding, meaning high borrowing costs for everyone. Government, business, your mortgage. Take your pick.
Toronto Real Estate Sales Fall To New Lows, Prices Tick Higher
Toronto home prices ticked 0.29% higher to $938,800 in February, but don’t read too much into it. Sales collapsed to their weakest level in at least 20 years at just 3,868 homes. Active listings fell too, but not enough to offset the market’s erosion. The uptick might be encouraging, but with fundamentals pointing to further loosening, it’s more likely noise than a reversal.
Bank of Canada Is “Chasing Its Own Tail,” Warns Bank of Canada
Canada’s central bank is “chasing its own tail,” according to Bank of Canada (BoC) research. A new staff report warns of a problem unique to how the country measures inflation: The cost of borrowing heavily influences CPI, but CPI also includes borrowing costs. The circular problem creates a countersignal—rate cuts lower CPI despite stimulating demand, and hikes raise it despite slowing growth. The result is policy fighting itself, dragging productivity lower.
Canadian Housing Affordability Makes Gains, Still Far Out of Reach: NBF
Canada’s housing affordability improved for an eighth straight quarter in Q4 2025—but the story is more complicated. A median household needs to dedicate 51.6% of its income to mortgage servicing, down 10.4 points from the record high two years ago. Much worse than 2019, and miles away from the 30% affordability threshold.
The composition shift is where it gets interesting. Improvements have been concentrated in deeply unaffordable markets, while affordable markets have eroded further. Statistically, the average might be improving, but really, the affordability floor is worsening.
Canada’s Rental Crisis Moves East: Nova Scotia Now Least Affordable Province
Canada’s rental crisis isn’t improving so much as it’s transforming into a new beast. The national median household needs 37% of its income to cover average rents in Q4 2025, down from the 46% peak in 2022. The improvements are primarily in BC and Ontario, while affordability remains stretched in other regions. Alberta is now the only “affordable” market, while Nova Scotia has claimed the title of least affordable market in the country.
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