Canadian Mortgage Delinquencies Rise, & Immigration Applications Slow

Recent data indicates a concerning rise in mortgage delinquencies across Canada. The Canadian Bankers Association (CBA) reports that over 10,000 mortgages were over 90 days past due in October, representing 0.21% of all tracked mortgages. This marks a 25% increase compared to the same period last year, despite significant government efforts to support homeowners.

Toronto, in particular, is experiencing notable challenges. Equifax data reveals that the city's mortgage delinquency rate reached 0.16% in the second quarter of 2024, doubling from the previous year and hitting its highest level since 2015. This sharp rise is especially concerning given ongoing policy measures aimed at preventing such outcomes.

In contrast, there is a silver lining in the national economic landscape. Statistics Canada reports a record number of active businesses as of September, following a period where closures outnumbered new openings. However, much of this growth is concentrated in real estate and related sectors like construction, indicating an increasing economic dependence on the housing market.

On the immigration front, Canada is observing a decline in temporary resident applications and extensions. In October, applications fell by 16% to 436,000, though this figure remains double that of 2021. The decrease aligns with government plans to reduce population growth by limiting temporary residents, a policy shift influenced by economic challenges.

These trends suggest that Canada's economic landscape is facing significant shifts. The rise in mortgage delinquencies, particularly in major urban centers like Toronto, coupled with a slowdown in immigration applications, could have far-reaching implications for the housing market and broader economy.

As the situation evolves, policymakers and stakeholders will need to closely monitor these developments. Addressing the underlying causes of mortgage delinquencies and reassessing economic dependencies will be crucial in ensuring Canada's financial stability in the coming years.