Staff research

• What typically happens before households fall behind on mortgage payments

  

  Sparks at Bank article Laura Zhao, Jia Qi Xiao

  Canadians usually pay their mortgages on time. But some fall behind on mortgage payments. Before they do, homeowners often increase their use of credit cards and lines of credit, and then fall behind on those payments.

  Content Type(s): Staff research, Sparks at Bank article Research Theme(s): Financial system, Financial stability and systemic risk, Household and business credit

• Consumers’ Path to Mortgage Delinquency

  Staff analytical paper 2026-3 Laura Zhao, Jia Qi Xiao, Aidan Witts

  Analyzing TransUnion data from 2015–2024, this study identifies a systematic timeline of distress where rising credit utilization and non-mortgage arrears precede mortgage delinquency by up to two years. This deterioration intensifies in the final six months, providing a robust suite of high-frequency indicators for monitoring emerging household stress.

  Content Type(s): Staff research, Staff analytical paper JEL Code(s): D, D1, D14, G, G2, G21, G5, G51 Research Theme(s): Financial system, Financial system regulation and oversight, Household and business credit

• Assessing the Buy Canadian movement one year later

  

  Sparks at Bank article Olga Bilyk, Jacob Dolinar

  Canada and the United States have both benefited from decades of free trade. But US tariffs significantly changed this relationship, and Canadians reacted. In our research, we explore the Buy Canadian sentiment one year after it emerged and measure how much it has shifted travel patterns and spending in grocery stores.

  Content Type(s): Staff research, Sparks at Bank article Research Theme(s): Monetary policy, Inflation dynamics and pressures, Real economy and forecasting, Structural challenges, International trade, finance and competitiveness

• Channels of Transmission: How Mortgage Rates Affect House Prices and Rents in Canada

  Staff analytical paper 2026-2 Nishaad Rao, Tao Wang

  We use Canadian data to examine how monetary policy affects house prices and the consumer price index for rent through exogenous changes in the mortgage interest rates. It finds that the price and rent impacts operate through various channels and that these impacts vary by region.

  Content Type(s): Staff research, Staff analytical paper JEL Code(s): E, E3, E31, E5, E52, R, R2, R21 Research Theme(s): Monetary policy, Inflation dynamics and pressures, Monetary policy framework and transmission

• The trade conflict hasn’t derailed supply chains. Here’s why.

  

  Sparks at Bank article Raheeb Dastagir, Louis Poirier

  Global supply chains have been working well despite abrupt shifts in US trade policy and rising global tensions in 2025. A big reason for this is that companies have improved how goods are shipped and warehoused to keep products flowing around the world. But these supply chains could be tested even more if the trade conflict worsens.

  Content Type(s): Staff research, Sparks at Bank article Research Theme(s): Monetary policy, Inflation dynamics and pressures, Structural challenges, Digitalization and productivity, International trade, finance and competitiveness

• Extraordinary Forward Guidance in Canada During the Pandemic

  Staff analytical paper 2026-1 Christopher S. Sutherland

  We consider two trade-offs inherent to extraordinary forward guidance (EFG): potency versus flexibility, and the credibility of forward guidance versus the credibility of inflation targeting. We argue that the form of EFG used by the Bank of Canada during the COVID‑19 pandemic balanced both trade-offs relatively well.

  Content Type(s): Staff research, Staff analytical paper JEL Code(s): D, D3, D8, D83, D84, E, E3, E37, E5, E52, E58 Research Theme(s): Monetary policy, Monetary policy tools and implementation

• Housing and the Long-Term Real Effects of Changes in Trend Inflation

  Staff working paper 2026-1 James (Jim) C. MacGee, Yuxi Yao

  An economy with fixed amortization mortgages and borrowing-constrained consumers leads to the level of inflation targeted having real effects on home ownership, consumption, and debt. Using a life-cycle housing tenure choice model, we show that by front-loading real mortgage payments, higher inflation lowers steady-state home ownership and the mortgage-debt-to-income ratio.

  Content Type(s): Staff research, Staff working papers JEL Code(s): E, E2, E21, E5, E50, G, G5, G51, R, R2, R21 Research Theme(s): Financial system, Monetary policy, Inflation dynamics and pressures

• Hedge funds and their trading strategies in the Government of Canada bond market

  

  Sparks at Bank article Andreas Uthemann, Adrian Walton

  Hedge funds are active in Canadian government bond markets and help improve market efficiency. But their trading strategies are not well understood. We offer insights into the range of strategies hedge funds use beyond the more commonly known cash-futures basis trade. We also explore the concentration of trading activity among a few large funds.

  Content Type(s): Staff research, Sparks at Bank article Research Theme(s): Financial markets and funds management, Market functioning, Market structure, Financial system, Financial institutions and intermediation, Financial stability and systemic risk

• Understanding the resurgence of food inflation in 2025

  

  Sparks at Bank article Olga Bilyk

  Inflation in grocery prices picked up in 2025, largely due to rising cost pressures that emerged in late 2024 and worked their way through supply chains. Compared with the cost pressures experienced during the COVID‑19 pandemic, these have been more limited, narrower in scope and more commonly tied to imported items.

  Content Type(s): Staff research, Sparks at Bank article Research Theme(s): Monetary policy, Inflation dynamics and pressures

• What’s behind the slowdown in Toronto’s condo market

  

  Sparks at Bank article Benjamin Straus, Nishaad Rao

  Strong population growth, low interest rates and robust investor demand drove an expansion in Toronto’s condo market over the past decade. But times have changed. Toronto’s condos are no longer providing substantial returns for short-term investors because population growth has eased and interest rates have risen. This is challenging the business models of condo builders.

  Content Type(s): Staff research, Sparks at Bank article Research Theme(s): Monetary policy, Real economy and forecasting, Structural challenges, Demographics and labour supply