Monthly Archives: May 2025

Desjardins’ Key Findings

A report by Desjardins, which had been published on May 23, 2025, has issued caution over a lack of fiscal transparency by the Canadian Liberal government from its delays of the 2025 Budget until the fall. Because of the government’s failure to publish timely deficit forecasts and fiscal targets, Canada risks eroding its fiscal credibility. Increased spending and tax cuts, driven by broader economic pressures from U.S. policies, are the main drivers of concern. Desjardins projects federal deficits to be much larger than had previously been planned, estimating a cumulative deficit of a quarter trillion dollars over the next five years (2025-2030). In fact, it has been predicted that Canada will issue $600 billion in debt in 2025-2026, approaching levels that had been seen during the peak of the pandemic in 2020-2021 (Graph 3 of the Report). This lack of transparency and growing deficits could lead to a sovereign rating downgrade, impacting Canada’s standing in global markets.

Toronto and Vancouver have already faced significant price drops and cooling demand in their condo markets, with prices in the Greater Toronto Area down 16.5% and Greater Vancouver down 9% since their 2022 peaks, alongside sales declines of 30% and 20% year-over-year as of April 2025, respectively. 

Higher Interest Rates

Large-scale government borrowing to finance these deficits may further drive up interest rates by increasing credit demand, with the Bank of Canada potentially raising rates to curb inflation from heightened spending, which would further increase mortgage borrowing costs, intensifying pressure on these already strained markets. Additionally, a potential sovereign rating downgrade could raise borrowing costs for developers, slowing new housing projects and exacerbating supply shortages.

Outlook: A Deepening Crisis – Canada needs Confidence Restored Now

Without immediate transparency and the communication of a plan by Canada’s new Prime Minister Mark Carney, Canada’s fiscal mismanagement and the delayed Budget 2025 are poised to deepen the economic strain, likely pushing the real estate market into a prolonged downturn, as affordability worsens and global confidence in Canada’s financial stability erodes further.

Reference: Desjardins Economics (2025). Mixed Signals on the Budget Risk Eroding Canada’s Federal Fiscal Credibility. 

https://www.desjardins.com/qc/en/savings-investment/economic-studies/canada-federal-deficit-debt-23-may-2025.html

Additional Information: https://palaceplace.com/are-we-really-in-an-economic-crisis

E: LDALINDA@DALINDA.NET • TEL: 416-725-7170

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Palace Place, 1 Palace Pier Court, and Palace Pier, 2045 Lake Shore Boulevard West, in Humber Bay Shores.

Follow @LukeDalinda on Instagram!

View all current and past Palace Place listings for sale here.

Luke Dalinda, Realtor. Royal LePage Real Estate Services Ltd., Brokerage.

View all current and past Palace Place listings for sale here.

When Canadians realize that we are not in a full-scale trade war with the U.S., but rather facing manageable trade disputes that can be resolved through mediation, confidence in the economy will surge. This shift in perception is likely to drive a significant increase in home and condo prices. Now is the optimal time to buy real estate before the market heats up.

Source: https://palaceplace.com/are-we-really-in-an-economic-crisis

E: LDALINDA@DALINDA.NET • TEL: 416-725-7170

Be sure that you SUBSCRIBE to this blog to be the first to know of new listings even before they hit MLS! Stay tuned. The Subscribe link is to the left of this post.

Palace Place, 1 Palace Pier Court, and Palace Pier, 2045 Lake Shore Boulevard West, in Humber Bay Shores.

Follow @LukeDalinda on Instagram!

View all current and past Palace Place listings for sale here.

Luke Dalinda, Realtor. Royal LePage Real Estate Services Ltd., Brokerage.

View all current and past Palace Place listings for sale here.

UPDATED – May 17, 2025 – 9:54 AM

Update 2 – May 18, 2025 – 1:08 PM

One of the key factors distinguishing the Dalinda Team is our belief that, “Information is the key in turning uncertainty into opportunity”. We pride ourselves in providing our clients with market news at the speed of need, enabling them to make timely, informed decisions. In that regard, here is our latest perspective on the Canada-US “trade war”.

“With many counter-tariffs gone, it’s time for Ottawa to stop playing politics and start telling Canadians the truth — the tariff narrative no longer matches economic reality.”

• Dr. Sylvain Charlebois, Dalhousie University https://x.com/foodprofessor/status/1923391088590475766?s=46&t=j-eN3GsLw6wYrkA55zhdGg
  

In a National Post article published on May 15, 2025, wherein an Oxford Economics study had found that, in April 2025, during Canada’s election campaign, Prime Minister Mark Carney had quietly moved to eliminate most retaliatory tariffs on U.S. goods, a decision made on April 16 and effective from May 7, following his first official meeting with President Trump on May 6. This had reversed the previous “dollar-for-dollar” tariff policy set by Justin Trudeau, though some tariffs, including those on orange juice, coffee, alcohol, and certain machinery, have remained. 

https://nationalpost.com/news/canada/canadas-new-tariffs-on-u-s-drop-to-nearly-zero-with-exemptions-oxford-economics

Carney’s almost secretive actions, which had not been made in a public announcement during the campaign nor have they been announced at any time since, had been intended to ease economic pressures. Why the lack of transparency?

https://gazette.gc.ca/rp-pr/p2/2025/2025-05-07/html/sor-dors122-eng.html

American Actions 

There were two key points from the April 2, 2025 White House Reciprocal Tariff Announcement.

1. Canada was not on the list for reciprocal tariffs. As per the Whitehouse fact sheet, Canada was exempt. https://www.whitehouse.gov/fact-sheets/2025/04/fact-sheet-president-donald-j-trump-declares-national-emergency-to-increase-our-competitive-edge-protect-our-sovereignty-and-strengthen-our-national-and-economic-security/
2. USMCA compliant goods will also remain at 0%. What is USMCA compliant you may ask? USMCA-compliant goods are products meeting the United States-Mexico-Canada Agreement’s rules of origin, qualifying for tariff benefits when traded between the U.S., Mexico, and Canada. Example: A car built in Ontario, Canada, with 75% of its parts sourced from Canada or the U.S. Non-compliant goods would be those made in China and shipped through Canada.

Canada is not for sale: Doug Ford’s misrepresentation

Doug Ford has falsely claimed that Donald Trump has offered to buy Canada. No such offer has ever been made. While Trump has expressed openness to Canada becoming the 51st state, he has never proposed purchasing it. Ford’s baseless assertion, tied to his “Canada is not for sale” merchandise sales, has shifted focus from critical tariff negotiations.

Again, some Canadian retaliatory tariffs remain in place, including on specific food items such as orange juice, alcohol, and coffee. Some American tariffs remain in place too, but nothing to substantiate our economic death spiral, as evidenced across numerous sectors.

Are we really in a trade war, or are we just in need of mediation over some trade issues?

Why is a false narrative being pushed upon us that, as Mark Carney had said on X on May 11, 2025, “We are in the biggest crisis of our lifetime”?

(Source: https://x.com/markjcarney/status/1921642068255904001?s=46&t=j-eN3GsLw6wYrkA55zhdGg)

Our Federal Government has just announced that there will be no Federal Budget for 2025, denying Canadians the the ability to scrutinize the use of public funds, undermining transparency and accountability.

“I still don’t like this one bit. Canadians have a right to know the state of the government’s finances—like how bad are they now” – Derek Holt, Vice President and Head of Capital Markets Economics at Scotiabank

In these challenging times, Sellers and Buyers are looking for confidence and hope, which we submit can only come from truth.

When Canadians realize that we are not in a full-scale trade war with the U.S., but rather facing manageable trade disputes that can be resolved through mediation, confidence in the economy will surge. This shift in perception is likely to drive a significant increase in home and condo prices. Now is the optimal time to buy real estate before the market heats up.

Luke Dalinda

UPDATE:

I question whether The Bank of Canada’s Financial Stability Report 2025, released on May 8, 2025, would have been so dark had the BoC known about Carney’s tariff reversal actions of April 16 and effective May 7, 2025? April 16 was also the same day that the BoC had decided not to decrease rates further.

Update 2 – May 18, 2025 – 1:08 PM

After immense pressure, Prime Minister Carney has agreed to deliver a Federal Budget this fall.

In response, Pierre Poilievre has said, “A so-called budget to be tabled in the fall when half the budget year is over. In what world does this make sense?”

E: LDALINDA@DALINDA.NET • TEL: 416-725-7170

Be sure that you SUBSCRIBE to this blog to be the first to know of new listings even before they hit MLS! Stay tuned. The Subscribe link is to the left of this post.

Palace Place, 1 Palace Pier Court, and Palace Pier, 2045 Lake Shore Boulevard West, in Humber Bay Shores.

Follow @LukeDalinda on Instagram!

View all current and past Palace Place listings for sale here.

Luke Dalinda, Realtor. Royal LePage Real Estate Services Ltd., Brokerage.

View all current and past Palace Place listings for sale here.

“The only way for honest people to elevate their lives is through their homes and their home equity, a sacred symbol of their labor, security, and hope for their children. This belief is what drives us to achieve the best possible outcomes for our clients.”

• Luke Dalinda

E: LDALINDA@DALINDA.NET • TEL: 416-725-7170

Be sure that you SUBSCRIBE to this blog to be the first to know of new listings even before they hit MLS! Stay tuned. The Subscribe link is to the left of this post.

Palace Place, 1 Palace Pier Court, and Palace Pier, 2045 Lake Shore Boulevard West, in Humber Bay Shores.

Follow @LukeDalinda on Instagram!

View all current and past Palace Place listings for sale here.

Luke Dalinda, Realtor. Royal LePage Real Estate Services Ltd., Brokerage.

View all current and past Palace Place listings for sale here.

The Bank of Canada’s Financial Stability Report 2025, released yesterday, May 8, 2025, warns that a prolonged trade war could trigger severe financial risks, including asset fire sales, market dysfunction in core funding markets, and the need for emergency liquidity measures. These disruptions could hit Canadian households hard, especially with 60% of mortgage holders facing renewals in 2025-26, many at higher interest rates. Banks may tighten lending, and some households could struggle to make debt payments, potentially leading to rising defaults under severe stress.

While other countries move quickly to secure U.S. trade deals, Canada remains complacent. 

As Eric Trump has recently posted on X, “I wouldn’t want to be the last country that tries to negotiate a trade deal with @realDonaldTrump. The first to negotiate will win – the last will absolutely lose. I have seen this movie my entire life…”

Read more:  

[Financial Stability Report 2025](https://www.bankofcanada.ca/2025/05/financial-stability-report-2025/)  

[Opening Statement](https://www.bankofcanada.ca/2025/05/opening-statement-20250508/)

E: LDALINDA@DALINDA.NET • TEL: 416-725-7170

Be sure that you SUBSCRIBE to this blog to be the first to know of new listings even before they hit MLS! Stay tuned. The Subscribe link is to the left of this post.

Palace Place, 1 Palace Pier Court, and Palace Pier, 2045 Lake Shore Boulevard West, in Humber Bay Shores.

Follow @LukeDalinda on Instagram!

View all current and past Palace Place listings for sale here.

Luke Dalinda, Realtor. Royal LePage Real Estate Services Ltd., Brokerage.

View all current and past Palace Place listings for sale here.