Markets are increasingly betting on the Bank of Canada delivering a 50-basis point rate cut during its October 23 policy decision, with the odds now sitting at around 53%
Even if the Bank doesn’t opt for a ‘supersized‘ rate cut later this month, a smaller quarter-point cut is virtually guaranteed, experts say. That would mark the bank’s fourth consecutive rate cut since it began easing rates in June.
“The Canadian economy continues to grind out sub-potential growth and, with inflation back at the 2% target, talk of more aggressive easing continues,” wrote BMO senior economist Robert Kavcic.
Despite July’s GDP growth coming in slightly above expectations at 0.2% month-over-month, Desjardins economists believe this modest gain won’t be enough to “derail” a potential 50-basis point rate cut by the Bank of Canada.
Economists LJ Valencia and Randall Bartlett emphasize that real GDP gains continue to lag behind population growth, with output per person declining in seven of the last eight quarters—”a streak not previously seen outside of a recession.”
“In all, a solid headline GDP gain July doesn’t change our call that the BoC will likely proceed with a 50-basis point rate cut in October,” they wrote in a recent report. “Easing inflation, ongoing labour market weakness, below trend real GDP gains and more per-person economic weakness provides a strong case for further monetary easing.”
Even if the Bank of Canada opts for a smaller quarter-point rate reduction, Kavcic notes that this doesn’t change the broader outlook. “The bigger picture is that we’re on a quick path back to rates that are closer to, if not slightly below, neutral,” he wrote.
Neo Financial named Canada’s fastest-growing company
Calgary-based Neo Financial has been recognized as Canada’s fastest-growing company, securing the top spot on the 2024 Report on Business list of Canada’s Top Growing Companies.
This recognition comes as Neo posted an incredible three-year revenue growth of 38,431%. Founded in 2019 by the co-founders of SkipTheDishes, Neo has quickly gained traction, now serving over one million customers and growing its team to 750 employees.
Neo Financial collaborates with top financial institutions to deliver a range of financial products, including credit cards, savings accounts, investment services, and mortgages. Last year, Neo ranked first in Deloitte’s 2023 Technology Fast 50 Companies to Watch list.
In a social media post, co-founder and CEO Andrew Chau said, “Just over four years ago, we started Neo Financial with a simple but bold mission: give Canadians more choice when it comes to their finances.”
“This isn’t just a ‘win.’ It’s a testament to our team’s relentless hard work and the trust Canadians have placed in us,” he added. “{Growing at this pace doesn’t happen without grit, tough calls, and a laser focus on what really matters—putting our customers first.”
Here’s a look at some of the other names that stood out as Canada’s Top Growing Companies this year.
- Bluroot (#103):
- CRM products for mortgage brokers and financial advisers
- 3-year revenue growth: 393%
- CMI Financial Group (#119):
- Offers lending and wealth management services
- 3-year revenue growth: 353%
- Amber Financial Services Group (#188):
- Mortgage investment corporation and private equity financing
- 3-year revenue growth: 228%
- Pineapple Financial (#242):
- Tech-focused mortgage brokerage
- 3-year revenue growth: 166%
- Axess Law (#356):
- National real estate and mortgage closing company
- 3-year revenue growth: 84%
- HomeEquity Bank (#399):
- Provides reverse mortgages
- 3-year revenue growth: 64%
Click here to access the full list.
Forbes unveils its Best Mortgage Lenders list
Speaking of lists, Forbes Advisor recently highlighted several top mortgage lenders in Canada for 2024, recognizing those offering competitive rates and strong customer service. Among the standout names were:
- Nesto Inc.
- Bank of Montreal (BMO)
- Equitable Bank
- Haventree Bank
- TD Bank
- Bank of China (Canada)
- IG Investment Management Ltd.
- THINK Financial
- First Nations Bank of Canada
- MCAP
Forbes reviewed 100 mortgage lenders across Canada, evaluating factors like interest rates, loan options, prepayment privileges, and customer service. Only lenders operating in at least four provinces and displaying their rates online were considered.
The rankings prioritize affordability, accessibility, and key features that impact the homebuying process, with interest rates weighted most heavily. Other criteria like broker privileges and timeliness also influenced the scores to reflect what matters most to consumers when comparing mortgage lenders.
Canadian mortgage arrears hold steady in September
Canada’s national mortgage arrears remained stable at 0.19% in September, according to data from the Canadian Bankers Association.
This rate, which tracks mortgages that are three or more months overdue, has hovered between 0.18% and 0.19% since December. In practical terms, this translates to 9,640 mortgages in arrears out of over 5 million total mortgages.
While the national arrears rate has edged up from a low of 0.14% in 2022, it remains well below the pandemic high of 0.27% seen in June 2020. Moreover, Canada’s arrears rate remains significantly lower than that of the U.S. and UK, according to the CBA.
Regionally, Saskatchewan leads with the highest arrears rate at 0.57%, slightly down from a recent high of 0.60% in January. In contrast, British Columbia and Ontario maintain the lowest arrears rates at 0.16% and 0.14%, respectively, with no recent changes in those provinces.
Mortgage snippets
- Sagen unveils updated New-to-Canada mortgage documentation requirements: Mortgage insurer Sagen has introduced a streamlined documentation process for individuals who have immigrated or relocated to Canada within the last five years. The update aims to simplify the mortgage insurance application process, making it easier for newcomers to access homeownership in Canada. For more details, visit Sagen’s New to Canada page.
- National Bank clears hurdle to buy Canadian Western Bank: National Bank of Canada has received a key regulatory approval, allowing its $5 billion all-stock acquisition of Canadian Western Bank to move forward. The Montreal-based bank announced that the Competition Bureau has cleared the transaction. However, the deal still requires approvals from the Office of the Superintendent of Financial Institutions and the minister of finance. Earlier this month, Canadian Western shareholders voted to approve the acquisition.
As we reported previously, National Bank announced the deal in June, aiming to expand its presence in Western Canada and diversify its client base
- CMI Financial Group joins the $1-billion club: Private mortgage lender CMI Financial Group says it has surpassed $1 billion in mortgage assets under administration, a milestone it says underscores the growing popularity of private lending in Canada.
“Private lending plays a crucial role as a complementary market, offering transitional solutions for borrowers who may not meet traditional lending criteria,” CEO Bryan Jaskolka said in a statement. “As we continue to expand our portfolio and enhance our offerings, CMI remains dedicated to bridging gaps in the financial landscape, providing flexible and accessible borrowing options to mortgage brokers and their borrowers, as well as compelling opportunities for investors.”
- Consumer insolvencies are steadying: New data from the federal government shows that insolvencies reported by Canadian households and businesses are stabilizing.
BIA (Bankruptcy and Insolvency Act) insolvencies totalled 11,800 in August, a decrease from 12,202 in July and below the six-month average of 12,194. Of the total insolvencies, the majority—11,388—were filed by consumers, consisting of 2,367 bankruptcies and 9,021 consumer proposals.
BMo notes that bankruptcies remain historically low, “suggesting lenders are working with borrowers to ease the original terms of the agreement.”
- Canada not alone in housing affordability challenges: While Canada is grappling with an affordability crisis, the Global House Price Index reveals that many developed economies are facing similar issues. Since the fourth quarter of 2019, global home prices have increased by 30%, though growth has slowed since central banks began raising interest rates. In contrast, disposable incomes have only risen by 20% over the same period.
According to BMO, although Canada’s home price increases have outpaced income growth, the gap is even more pronounced in countries like Australia and the U.S.
Next Steps: Mortgage industry career moves
“Next Steps” is a feature in our weekly news roundups that highlights notable job changes and career advancements within the mortgage industry. If you have a job update to share, we welcome your submissions to keep the community in the loop.
MCAN announces new VP and COO
MCAN Financial Group has announced the appointment of Santokh Birk as its new Senior Vice President and Chief Financial Officer, effective October 1, 2024.
With over 30 years of experience in finance, risk management, and corporate strategy, Santokh brings a wealth of knowledge from his previous role as Senior Vice President, Finance & Chief Accounting Officer at Home Trust Company. His career also includes senior leadership roles at HSBC across Canada, the Middle East, and the U.S.
Santokh will be joining MCAN’s executive leadership team and supporting President & CEO Don Coulter. His expertise is expected to play a critical role in driving MCAN’s continued success. MCAN also extended its gratitude to Peter Ryan, who served as Interim CFO and will now return to his role as Vice President, Controller.
First National announces two promotions
First National has announced the promotion of Marco Riccio to Vice President, Residential Mortgages.
Marco Riccio brings over 15 years of experience at First National, where he has held a range of leadership roles. Before his promotion, he was Assistant Vice President of Residential Underwriting for Quebec from 2018 to 2024, and prior to that, he served as Manager of Residential Underwriting for nearly nine years.
Earlier in his career, Riccio worked in a senior underwriting role at HSBC, focusing on Eastern Canada.
Marco Nozzolillo has been appointed as Assistant Vice President, Residential Underwriting, Montreal.
Nozzolillo has been with First National for over 16 years, previously serving as Director of Residential Underwriting since 2021.
He also held the role of Manager, Residential Mortgage for over 12 years, contributing significantly to the company’s underwriting operations.
M3 appoints new Chief Information Officer
M3 Tech has announced the appointment of Jerry L. Lo as its Chief Information Officer (CIO).
Previously serving as Executive Vice President of New Partnerships & Partnership Development at M3 Venture, Lo will now be responsible for shaping M3 Tech’s technological strategy and vision.
The company noted that in his previous leadership role, Lo demonstrated “a strong capability in driving partnerships and business development,” and that he is expected to “play a critical role in the company’s continued growth.”
Stephen Watton joins Farm Lending Canada
Farm Lending Canada has appointed Stephen Watton as Vice President, Business Development for Eastern Canada.
Watton brings significant experience in mortgage originations and business development from his previous leadership roles at Marathon Mortgage Corp., Combined Insurance, and Bridgewater Bank.
He will be responsible for driving business growth and expanding the company’s presence in Eastern Canada.
EconoScope: Key economic releases on tap for next week
| Country | Date | Time (ET) | Release | Previous Reading |
|---|---|---|---|---|
 |
Mon. Sept. 30 |
National Day for Truth and Reconciliation (bond markets closed) | ||
 |
Mon. Sept. 30 |
1:55 p.m. | Federal Reserve Chair Jerome Powell to give Nashville address | |
|
Fri. Sept. 27 | 8:30 a.m. | Employment data (September) | +142,000 4.2% |
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Amber Financial Services Group Andrew Chau Axess Law Bank of Canada Best Mortgage Lenders Bluroot Canada’s Top Growing Companies canadian bankers association CMI Financial Group consumer insolvencies delinquencies desjardins EconoScope Farm Lending Canada First National Forbes Global House Price Index HomeEquity Bank Jerry L. Lo LJ Valencia M3 Mortgage Group Marco Nozzolillo Marco Riccio MCAN mortgage arrears Neo Financial Pineapple Financial randall bartlett Robert Kavcic Santokh Birk Stephen Watton
Last modified: October 2, 2024