In a speech in Washington, BoC Deputy Governor Timothy Lane outlined the challenges the Canada is facing. Firstly, uncertainty on US trade policies held back Canadian business investments. Secondly, lower oil prices caused deterioration of Canada’s terms of trade. Thirdly, housing investment and consumption softened. Together, they resulted in “temporary slowing of Canada’s economic growth.”.
On the other hand, the US economy “has been powering ahead with the effects of the fiscal stimulus”. Fed also raised interest rates a couple of times last yet. The combined effects put downward press on the Canadian. And, “the lower Canadian dollar, in turn, will help support the economy through this period.”
