Historically speaking, our projected increase in the Bank of Canada rate isn't all that high. Canada has experienced rates between 18% and 20% in the past. If the Bank of Canada's policy rate went from 1.75% to 2.75%, it would be significant in absolute terms, but not that high in relative terms.
We believe such an increase would lead to a neutral rate. The monetary policy would have neither the effect of stimulating the economy, nor the effect of curtailing it. For that reason, we project the rate will rise until it reaches 2.75%, a rate that, in our view, is consistent with a neutral monetary policy. In other words, it neither stimulates the economy nor curbs growth.
The impact on households would not be negligible, to be sure. It would be significant, but not overly negative.