Finance Minister Joe Oliver has said he will not interfere with the housing market – or force banks to lower their interest rates, despite the Bank of Canada’s announced rate cut.
“I do not intend to interfere with the day-to-day operations of the banks,” Oliver said in an e-mailed statement Thursday, according to BNN. “I have no current plans to introduce new rules regarding residential mortgages.”
It appears that at least one big bank is holding off on cutting its prime rate and — with Oliver stating he won’t force the banks to do so — the other big banks may follow suit.
“Our decision not to change our prime rate at this time was carefully considered and is based on a number of factors, with the Bank of Canada’s overnight rate only being one of them,” said Alicia Johnston, a spokeswoman for TD, told CBC News.
Oliver has taken a soft line when it comes to mortgage rates and the housing market since taking office.
This past June, he responded to critics calling for more active participation from the government in reining in the housing market.
“I don’t think it’s the role of government to set interest rates or rates for mortgages,” Oliver said on Business News Network. “The rates are quite low and they’ve been coming down but a very small amount.”
Oliver expounded on his position by noting that CMHC has forecasted a soft landing and that the government will continue to monitor the market while also reducing the level of influence it will have going forward.
“We don’t believe that there’s a major problem at this point,” he said.
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