Owner system

Audit of the Canadian Financial System

But the main vulnerabilities remain important

The financial vulnerabilities that existed before the pandemic still exist. That’s why we are monitoring the financial health of households, businesses and financial institutions as the recovery progresses.

Housing market imbalances

House prices have risen sharply throughout the pandemic. After some moderation it picked up, but we are closely monitoring the risks that accompany this change. If house prices fall quickly again, it could delay household spending.

High levels of household debt

During the pandemic, some households were able to save more. This is in part because there were:

  • limited possibilities to spend during lockdowns
  • unprecedented government support

At the same time, household debt increased as more and more people took out mortgages, and those mortgages were higher on average. Financially strained households have little leeway to manage a disruption in their income or an increase in the cost of servicing their debt.

Climate change

Climate change and its effects have clearly accelerated. The flooding in British Columbia is a devastating example of the risks that extreme weather events pose to homes, businesses and other assets. Climate-related risks also include those arising from the transition to a low-carbon economy.

We work with partners around the world to better analyze and assess climate-related risks to our financial system.