OTTAWA (Reuters) - Canada’s federal budget on Thursday did not include any measures to tighten mortgage rules further as a means of cooling down the housing market.
“The government continuously monitors housing finance risks and takes action when necessary. Adjustments to the rules for government-backed and insured mortgages were announced in July 2008, February 2010 and January 2011,” the budget document noted without hinting at similar new steps.
Household debt, largely the result of mortgage borrowing, is the biggest domestic risk to the economy in the view of Bank of Canada Governor Mark Carney.
Finance Minister Jim Flaherty has acknowledged the risk but has also signaled reluctance to choke the property sector lest it derail a fragile economy. (Reporting by Randall Palmer; Editing by Jeffrey Hodgson)