Trudeau's tighter mortgage rules likely Canada's last

Housing issue: While Morneau says he is compelled to act for financial stability reasons, the supply issue hasn’t been lost on him. – Reuters

OTTAWA: In 2006, in the middle of one the hottest years on record for Canadian housing, then Bank of Canada governor David Dodge sent a testy letter to his counterpart at the country’s mortgage insurer warning about lax standards fuelling demand for homes. Today, Dodge has new words of caution: worry more about supply.

“It’s not very complicated: there’s a supply curve, there’s a demand curve. If you restrict that supply curve then don’t be surprised by high prices,” said Dodge, who over four decades as a public servant worked at the Canada Mortgage and Housing Corp and headed both Canada’s finance department and its central bank.