A senior Bank of Canada official said the recent increase in the number of newcomers had pushed up rent and house prices and was adding to pressure on inflation.
In the text of a speech in Windsor, Ontario, Deputy Governor Toni Gravelle said that while increased immigration contributes to the growth of the country’s economy and workforce, it also fuels inflation through demand for housing.
He told the Windsor-Essex Regional Chamber of Commerce that rent increases continue in Canada while they decline in the United States, in part because housing construction south of the border has always been adapted more quickly to demographic changes.
The deputy governor at the Bank of Canada has warned all levels of government that they must work together to reduce barriers to housing construction or else rents and home prices could continue to rise.
Canada has seen strong population growth over the past two years as the federal government pursues more ambitious immigration goals and allows more temporary residents to enter the country.
The Bank of Canada kept its key interest rate at 5% on Wednesday, but warned it was prepared to raise rates if necessary in its fight against inflation.
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