• As the BoC continues to tighten interest rates, a cooling Canadian economy might bring relief to the supply and demand imbalances in the labour market. Housing Starts: • Canadian housing starts rose by almost 12% in

April-June 2022 compared to the previous threemonth period but came in lower than the highs experienced in 2021. • While slower than last year, the level of housing starts across Canada remains historically high. Starts came in stronger in Nova Scotia as well as the Prairie provinces, making up for losses seen in British

Columbia and Ontario. • Activity in the resale housing market has softened considerably, due to high inflation and higher mortgage rates crimpling consumer confidence. If this slowdown persists, builders may struggle to bring further units onto the market. Gross Domestic Product (GDP) Growth: • As the Canadian economy deals with inflation levels not seen in nearly 40 years, the BoC hiked its target

for the overnight lending rate to 2.5% on July 13, 2022. • As a result of the increased cost of living and rapidly rising interest rates, Canadian GDP growth has started to stall and consumer confidence is falling. • As economic conditions continue to slow, concerns over a prolonged housing market correction and a recession, have tempered activity in the real estate industry and goods-producing sectors like construction and manufacturing. • While the global economy has been hit by rising energy, food, and other commodity prices, Canada’s resource-based industries may benefit from shifting global supply chains and stronger demand for its products. • In their latest Monetary Policy Report, the BoC noted further interest rate increases may be needed to temper domestic demand pressures, anchor inflation expectations and ultimately reduce inflationary pressures in the economy. The BoC does not expect inflation to return to the 2% target until 2024.