Finance committee  As I mentioned, the imbalances in the housing market and the vulnerability to indebtedness is something we've been flagging for about the past two years. It's something that's really been a concern for us in terms of financial stability, in particular the indebtedness. The two really work in tandem, if you will.

Finance committee  We don't have that much data. You probably know the data I'm going to cite as well as I do. Before the taxes were implemented in Vancouver, about 10% of purchases were made by foreigners. This has fallen to about 4% of 5% in the latest data. That's the range we know about in terms of that magnitude.

Finance committee  It is always a bit difficult to answer that question, because we have to be mindful of the effect that that could have on the markets. In our last review, published in December, we noted that several fundamental factors impact price increases, such as demographics, interest rates and low mortgage rates, as well as constraints on supply which we discussed earlier.

Finance committee  That's difficult to say. We don't have a lot of data on that right now. These policies are relatively new and have not been put in place in many countries. It is difficult to assess their impact given the data and tools at our disposal. Before we can know whether the government did everything it could, we would have to know the impact of the measures it has taken.

Finance committee  I'm not going to comment on the tools per se, but in terms of the impact across cities and across regions, we've done some work on this in looking at who would be impacted and which cities would be impacted. What we found is that not only the GVA and the GTA are impacted, but a host of cities are impacted.

Finance committee  No, that has this impact. At the same time we want to make sure that people who are buying homes are resilient to future shocks, so this comes as a stress test. We completely agree that this has the impact of reducing demand at the margin. But again, we don't want people to get into loans they cannot repay.

Finance committee  I'll start. I'm not sure my swan is going to be as black as you want. One of the things we've been worried about in the risk scenario that we have in the FSR is really this idea that you could have another recession in Canada, an increase in the unemployment rate at the national level, which could impose stress on highly indebted households, with their having difficulties in making payments potentially, as well as stress on the financial sector as a whole.

Finance committee  Yes, we've noted that in our latest monetary policy decision, this backup in bond yields. I think this situation might be slightly different in part because this seems to be driven by expectations of future growth in the U.S., maybe because of fiscal policy and higher inflation expectations.

Finance committee  Good afternoon, Mr. Chair and distinguished members of the committee. Thank you for the invitation to appear before this committee. My colleague Don Coletti, who is an advisor to the Governor, is joining me today. We are pleased to be able to contribute to your timely study on the Canadian real estate market.