Premiers voice displeasure over latest rate hike from Bank of Canada

Homeowners and homebuyers could be facing an even tighter cash crunch as the Bank of Canada once again raised its benchmark lending rate.

As premiers met for a final day in Winnipeg, some say the jump to five per cent is not needed and devastating for families.

"The inflationary pressures are very significant," said Manitoba Premier Heather Stefanson at the meeting on Wednesday.

This is the 10th time since March 2022 that the Bank of Canada has raised its key interest rate, all in an effort to cool the economy and get inflation back down to two per cent, which the bank doesn't expect will happen until mid-2025.

"It's just a very hard pill to swallow right now," said economist Armine Yalnizyan.

The latest hike could pose another roadblock for first time homebuyers and could increase mortgage payments for variable terms and renewals.

"Whether you're a renter or an owner, rich or poor, higher interest rates are going to affect that particular element of your budget."

For Richard Mattson, he has been mortgage free for years.

"I feel sorry for those who are caught in that mortgage conundrum right now," said Mattson.

But he is concerned for his 31-year-old son, who rents an apartment.

"We do not know when or if he'll be able to afford a house."

Along with Stefanson, other premiers voiced their displeasure with the latest hike.

"I'm not in favour of these high rates, I'm just not," said Ontario Premier Doug Ford.

"This is devastating news for families that are in debt, that have borrowed money for various reasons," said B.C. Premier David Eby.

Mattson hopes there is a better way to chip away at inflation without hiking interest rates anymore.

"It's not a good situation and I wish the banks could do something about it," he said.

Since the bank started raising rates, inflation has dropped from 8.1 per cent to 3.4 per cent.