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Falling Car Sales Are Latest Sign of Rate Hikes Hitting Canada

  • Central bank is expected to pause at its decision this week
  • Increases being felt sooner than expected, CIBC economist says
Car Dealership auto

Photographer: Daniel Acker/Bloomberg

Plunging automobile sales add to evidence that higher borrowing costs are beginning to eat into Canadian economic growth, possibly faster than the central bank expected.

Light vehicle sales dropped 9.4 percent in November from a year earlier, the most since 2009, according to a report Monday by DesRosiers Automotive Consultants Inc. Outside the financial crisis, the decline was the biggest since 2004. Meanwhile, Bank of Canada data show growth in residential mortgages decelerated to 1.38 percent in September on an annualized three-month basis, the weakest pace since 1982.