Alberta Finance Minister Joe Ceci is not thrilled about the Bank of Canada’s interest rate hike.
Ceci, who was speaking at the Calgary Stampede on Wednesday, said now is not the greatest time for the 0.25 per cent hike.
MORTGAGE CALCULATOR: See how rising interest rates affect your payments
“I would’ve appreciated a little more time. I think Albertans would’ve appreciated a little more time,” he said.
“We’ve had pretty stable house prices here and low mortgages and this will cause a little bit of a tick in that.”
Ceci said the rate hike should not affect the province’s books too much – he said that has already been priced into Alberta’s borrowing.
According to budget documents, a rise in interest rates by one per cent equates to an extra $230 million in debt-servicing costs, meaning a 0.25 per cent hike will cost the province an extra $57.5 million.
Michael Roberts, a professor at the School of Business at MacEwan University, said the rate hike should not have come as a surprise to the province.
“The provincial government has chosen to take on a substantial amount of debt. It’s going to cost the provincial government a lot more to handle their debt. But I think they should’ve seen it coming and they should’ve been planning for it.”
Roberts said Albertans will see both upsides and downsides to the news.
“It strengthens the Canadian dollar so that’s one positive impact for the people of Alberta. With a stronger dollar, I suppose, the cost of purchasing things from outside Canada decreases,” he said.
“Any increase in interest rates should have at least some dampening effect on the housing market. Where people will probably feel it immediately – if they have lines of credit.”