- Timothy Lane, Bank of Canada Deputy Governor
Canada's building permits jumped more than expected in December, boosted by increased construction intentions for multi-family homes. According to Statistics Canada, the total value of building permits issued by Canada's municipalities in December surged 11.3% to C$6.92 billion, whereas analysts had projected a 6.2% rise. However, November's figure was downwardly revised to 19.9% from 19.6%. Measured on an annual basis, permits issued dropped 1.6%. Residential building permits soared 16.3% as plans to build multi-family dwellings such as apartments and condominiums advanced 39.1%. On the other hand, other residential data disappointed. Canada's housing starts dropped for a second month in a row in January, led by weakness in provinces, which got hurt by declining oil prices and rising unemployment rates. The seasonally adjusted annual rate of housing starts dropped to 165,861 units from the downwardly revised 172,533 in December, whereas analysts were projected to see 185,000 starts.
Meanwhile, the Bank of Canada said that its benchmark interest rate should not be considered the primary tool responsible for supporting Canada's financial system. Other regulatory measures are required to help keep financial stability and address any emerging vulnerabilities.
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