This Week’s Top Stories: Canada Already In Recession & Limits On Foreign Students

Time for your cheat sheet on this week’s top stories.

Canadian Real Estate

Do Canada’s Immigrants Stay? Fewer Continue To File Taxes

Canada manages to attract a lot of immigrants, but how many are actually staying? Taxfiler data reveals 91% of immigrants that arrived in 2019 filed taxes for that year, but that same group fell to just 85.5% for the 2021 year. Falling filing rates aren’t a new trend, but the speed of the rate falling has never been this fast. This begs the question, how does Canada track who still lives in the country? Spoiler: It’s not very sophisticated and likely to undercount the population that left.

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Canadian Mortgage Borrowers Will Have To Wait For Rate Relief: BMO

Fixed rate mortgage borrowers have seen some relief as moderating inflation expectations have pushed bond yields lower since October. After the Bank of Canada rate announcement, BMO doesn’t see much more relief in the near term. Despite the central bank’s overnight rate decision not directly impacting government bond yields, its outlook will impact how they move. The bank’s economists warn borrowers looking for relief they’ll have to wait until mid-year at the very least.  

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Bank of Canada Drops Threats of Hikes, Shifts Discussion To Cuts

Canada’s central bank didn’t cut rates but the announcement may still influence perception. The Bank of Canada (BoC) didn’t change the key interest rate, as widely expected. However, notably absent was a fixture in recent speeches—stressing they are ready to hike further if needed. Instead, the BoC Governor mentioned the council’s discussions have shifted towards when to begin cutting rates. They made a similar move last year which ignited borrowers, causing two additional hikes to follow. Did they just repeat the same error?

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Canada Already In Recession, Hard Landing To Cool Inflation: Oxford Econ

Canada’s economy isn’t just slowing down, it’s already in recession warns Oxford Economics. The prominent macro-research firm points to an 0.3% contraction for Q3 GDP, significantly lower than the growth expected by the BoC. The data for Q4 won’t be out for a few weeks, but preliminary data isn’t leaving many optimistic. The upside is the recession will likely cool inflation much faster than the central bank expects.

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Canada To Limit International Students After Drop In Applications

Canada is moving to limit international students, and this time they’re serious. The Government of Canada (GoC) has announced a hard limit on study permits. Preliminary estimates show they expect to reduce the numbers by a third compared to last year. This comes after recent months have seen a significant decline in applications, indicating studying in Canada may have lost its luster and policymakers are attempting to save face. 

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