TORONTO (Reuters) - Canada is not considering further action to rein in the housing market, Finance Minister Bill Morneau said on Friday, even as he stressed that he would remain focused on ensuring that lenders behave prudently.
Earlier this month, the government tightened mortgage rules and closed a loophole on home sales, the second time it has acted in the last year to cool a market that some fear is too hot.
“We will continue to be vigilant in monitoring the market,” Morneau told reporters. “We have no further action under consideration in terms of housing.”
Morneau said it was too soon to judge the impact of the most recent changes on housing but added that the government was monitoring the response. Some economists have suggested the tighter rules could dampen housing activity and weigh on the economy.
“We will remain on top of this because we know this is a very important risk to our economy,” Morneau said.
In a speech outlining some of the policy changes the 1-year-old Liberal government has made, Morneau said he would ensure that future interest rate increases or a housing market downturn do not put economic growth at risk.
Morneau emphasized that the job of protecting the financial system from risk fell to him, but he said he receives advice from top officials at other agencies, including the governor of the Bank of Canada and the superintendent of financial institutions.
“At the end of the day, I am ultimately responsible for supporting financial security and the stability of our financial system,” Morneau said.
The speech came ahead of next week’s fiscal and economic update from the government.
With the economy struggling to regain momentum, some expect the government could speed up the infrastructure spending plan it laid out in March’s budget.
The Liberals could increase investment spending by about C$5 billion ($3.74 billion) for the current fiscal year and by about C$10 billion for the following year, said Nomura economist Charles St-Arnaud.
That could be done by bringing forward planned spending or announcing new investments, said St-Arnaud, who expects deficits to be slightly bigger than currently forecast.
“We may need to worry more about current growth than where the deficit will be,” he said.
($1 = 1.3375 Canadian dollars)
Reporting by Alastair Sharp; Writing by Leah Schnurr in Ottawa; Editing by Paul Simao and Lisa Von Ahn