The governor of the Bank of Canada gave a speech in New York Tuesday in which he highlighted the weakness in the global growth outlook and how lower interest rates are likely to be the new normal. Stephen Poloz ruled out a further cut in Canada’s interest rates though, unless there is a “shock of some significance.” While the governor’s words were uncomfortable for investors – pension funds were specifically warned to expect lower rates for some time – it is clearly good news for mortgage rates.

Global trade has reached a new “balance point” where it will contribute less to international growth than it did over the two decades before the financial crisis, Bank of Canada Governor Stephen Poloz said today in New York.

The surge in global trade that occurred before the financial crisis was a historical exception, Poloz said in a speech to Canadian and U.S. securities industry associations, reflecting a pace of globalization that won’t be replicated. While slower trade will reduce the global economy’s ability to grow, it isn’t necessarily a sign of underlying deterioration, he said.

“The weakness in trade we’ve seen is not a warning of an impending recession,” Poloz said. “I believe that the most important factor behind the slowdown in trade growth is that the big opportunities for increased international integration have been largely exploited.”

The comments reflect recent warnings by Bank of Canada officials that the Canadian economy’s long-term capacity to grow is slowing beyond short-term cyclical factors such as declining oil prices. Those forces — which are driving down long-term interest rates — reflect a complex list of things such as an aging workforce and slowing global trade.

“My argument is that a significant part of the strong productivity performance in the two decades before the crisis was due to globalization, and that the globalization process may have brought trade in the global economy to a new balancing point,” Poloz said.

 Poloz also said investors shouldn’t presume monetary policy is no longer effective.

“One worry I hear a lot these days hits pretty close to home — the idea that monetary policy just isn’t working anymore,” Poloz said.

“That’s one myth I’d like to dispel right off the top,” he said. “The fact is that policy actions — both monetary and fiscal — taken in the wake of the global financial crisis prevented what would have been a second Great Depression.

An increase in interest rates to 3 percent or 4 percent would trigger a recession, he said.

There are reasons to still be optimistic on trade, he said. Part of the slowdown is cyclical, reflecting falling business investment, and trade should pick up as the world economy begins to gain traction. There are signs that companies and investors are finding ways to “improve the efficiency of supply chains in many geographic areas.” There is also room for policy makers to nudge the global integration process forward even if the big gains to trade have already been exploited.

“For policy makers, of course, this means we should be working to help initiatives such as Trans-Pacific Partnership and the Comprehensive Economic and Trade Agreement between Canada and the European Union become a reality,” Poloz said.

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“The really interesting thing about this report is the insight it provides into foreign ownership of condominiums in Canada by age of structure. For example, in the downtown core of Toronto, we know that, in buildings completed since 2010, about 10 per cent of those units are owned by foreign buyers,” Bob Dugan, chief economist, Canada Mortgage and Housing Corporation, said. “This compares to about 2.3 percent for units completed during the 1990s. This represented another piece in the puzzle of foreign investment in Canada. It remains a top priority for CMHC to continue to get more information on foreign investment in Canada’s Housing market.”

The report found that foreign ownership is most prevalent in new condo buildings in Toronto and Vancouver.

In Toronto about 10% of newer buildings (built after 2010), compared to 2% of those buildings built in the 1990s.

A similar trend was found in Vancouver, where 6% of units in newer buildings are believed to be foreign-owned.

Highlights from the report include;

•In the Toronto CMA, the share of foreign ownership is less than 2% for buildings completed before 1990 and 7% for newer constructions completed since 2010. This effect is even more pronounced in Toronto Centre where about 10% of the newer stock is owned by foreigners.

•In the Vancouver CMA, foreign buyers’ share rises from less than 2% for properties built before 1990 to about 6% for those completed since 2010.

The stats were pulled from a fall 2015 survey.

CMHC admits the data isn’t perfect.

“At this time, no existing tool can provide a definitive measure of the level of foreign investment in Canada’s housing markets,” it said in a release. “That said, CMHC regularly engages in discussions internally, as well as with industry experts, as part of its continued efforts to develop a program of work that would better capture data on foreign buyers.”