Quote:
Originally Posted by photon
Wouldn't interest rates go down with the US economy going south? To keep our dollar down vs. theirs, and to make sure our economy doesn't cool too much? Inflation is an issue in Alberta, not not really nation wide so they won't raise rates just for Alberta.
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Exactly.
If Calgary has too much inflation and gets too expensive people will just move away. Generally speaking, barriers to provincial immigration are low so labour can migrate. If wages support costs of living, and people are happy with the quality of life, they will continue to move here. If prices of housing here are too high they will go somewhere else.
In this forum we saw that with Shane. He moved here found a place after staying here a while decided it was too expensive and moved back to the east coast.
So while Calgary and Edmonton will bring the average inflation rate for the country up, as long as overall country wide the rate is within the Bank Of Canada's acceptable limits, they won't be required to increase the interest rates.
If anything, there is pressure right now to lower the rates to keep the Canadian dollar from getting too high vs the American dollar.