COS Financial Plan 2018 - 2022

ECONOMIC OVERVIEW

Increased interest rates are expected to weigh down consumer spending and residential investments. Tighter mortgage rules and higher lending rates are expected to put a strain on housing affordability and sales. Elevated housing prices and household debt continue to be key domestic risks to the economy. The Canadian dollar is forecasted to trade between 75 to 80 cents against the US dollar this year. The loonie’s value will be buoyed as the BOC continues on its path to normalize interest rates and investors take advantage of improving yields. Negative news on NAFTA negotiations could work against potential gains in the currency’s value. The uncertainties surrounding NAFTA may cause businesses to hold off on investments. The sixth round of negotiations are underway and it remains to be seen if any significant progress can be made. President Trump has reiterated his threat to pull out of NAFTA. With Mexico’s election campaign starting in March, and voters heading the polls in July, time is running out as a new agreement cannot be ratified by Mexico during election season. The US midterm elections will be held in November 2018 and any hops of the US ratifying a new agreement as the vote draws close is slim. Many experts believe that NAFTA renegotiations will be pushed into 2019.

Source: Bank of Canada

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2018-2022 Financial Plan

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