Bank of Canada's outlook rests on weaker footing

We think the Bank of Canada's latest projections for economic growth this year and next are too high, mainly because they rely more heavily on sustained growth in household expenditures, particularly on new and existing housing. While we have no doubt that favourable financing conditions will help to buffer housing investment this year and next, we seriously doubt sustained growth is in store, particularly if we are right in expecting a correction in house prices.