Canada Bank Rate the Lowest Since 1955

The last time Canadians have seen a bank rate of 1.50% was actually July of 1955 but in August, 1958 the bank rate was 1.51% so that was pretty close.  The bank rate is now lower than it was during the 1930's when it sat at 2.5% for 10 years. (Source: Bank of Canada, Department of Monetary and Financial Analysis)

The Bank of Canada has now admitted a recession and all eyes are on stabilizing the economy rather than target inflation rates.  Policy over rate cuts has drastically changed since the Great Depression and hopefully we have learned from past mistakes but these are unprecedented times so drastic action is what is demanded.   Canada now sits and waits to see what will happen come January 26 when parliament reconvenes and the budget is presented.  Stephen Harper has delayed a confidence vote that would have toppled his government.  The coalition that was formed as a result of the conservative's budget update his struggling to survive the suspension in parliament.

Current Liberal leader Stephane Dion will be replaced prior to the budget and with only one candidate remaining in the race it looks like the new Liberal leader will be Michael Ignatieff.  Ignatieff has been quoted as saying 'coalition if necessary, but not necessarily coalition' which suggests that he might be willing to work with the Conservative Party and their budget.

Canada is in great need of stability and a government that can get past its differences in pursuit of working with Canadians through these tough times.

The silver lining to this is that investing and buying real estate is very affordable and presents great opportunities for long term gains as well as revenue generating properties.  Canada's banking system has held steady through out this credit crisis and money is still available for housing.  If you can afford to do it now is one of the best times to make long term investments.

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