TORONTO (Reuters) - Canada is not considering further action to rein in the housing market at this time, the country’s finance minister said on Friday, even as he underscored that he will 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 has become too hot.
“We will continue to be vigilant in monitoring the market,” Finance Minister Bill Morneau told reporters following a speech. “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 the housing market, 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 that outlined some of the policy changes the one-year-old Liberal government has made, Morneau said he will ensure that future interest rate increases or a housing market downturn do not put economic growth at risk.
Morneau also sought to make clear that the job of protecting the financial system from risk fell to him, though he acknowledged he receives advice from top officials at several 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 moves the government has made allows the Bank of Canada to focus on inflation stability, Morneau said. The low interest rates the central bank has kept in place as it tries to boost the economy have been partly responsible for the strength of the housing market.
The speech came ahead of next week’s fiscal and economic update from the government. Morneau said last week that the update will also consider advisers’ recommendations for boosting immigration and creating an infrastructure development bank.
The fiscal update is not expected to include major new spending and will not be focused on short-term stimulus measures, the Globe and Mail newspaper reported on Thursday, citing unnamed sources.
Reporting by Alastair Sharp; Writing by Leah Schnurr in Ottawa; Editing by W Simon and Paul Simao