WASHINGTON (Reuters) - The Canadian government stands ready to act to cool the housing market if necessary but does not see a housing bubble or the need for any dramatic moves, Finance Minister Joe Oliver said on Thursday.
“We’re watching it, obviously. We don’t believe we’re in a bubble,” Oliver said, adding that neither did the Bank of Canada nor Canada’s housing agency nor the Organization for Economic Cooperation and Development.
Speaking to reporters ahead of a meeting of the Group of 20 leading industrialized countries, Oliver said Canada’s market was two-tiered, with numbers continuing to rise in Calgary and Toronto, a little less so in Vancouver, but flat or declining a little in much of the rest of the country.
“We’re watching consumer debt and we’re watching price increases. We’re aware that in some urban centers affordability is an issue, but the equity-to-debt ratio on homes is quite healthy actually overall,” Oliver.
He recalled that the government had taken regulatory steps a number of times “to take the froth out” of the market. “We will consider taking other measures as necessary, but I do not see any need for anything dramatic,” he said.
Canada’s housing market avoided the crash that the United States went through. Its urban condominium market has been particularly hot.
Oliver, speaking on the sidelines of a meeting of G20 finance ministers, said Canada would continue to emphasize the importance of fiscal responsibility, even while saying European nations with fiscal room needed to be flexible.
Oliver is scheduled in the next two months to deliver his regular fall fiscal report which will update his spring budget, and there has been some speculation he might provide an early tax cut as the government gears up for an election next October.
Asked if he would include any new fiscal measures in the fall update, he said: “That’s unusual to do that, but I’m not signaling anything in that regard.”
He also said he hoped to reach a voluntary agreement soon with financial institutions to reduce fees for credit-card transactions, which are higher than in most of the world.
Reporting by Randall Palmer; Editing by Andrea Ricci