I have a couple of comments.
First, on my initial reference to households not being stretched, that was a comparison to, say, U.S. households during the global financial crisis in the great recession and that situation.
There's no question that as these mortgages are reset and renewed, it will potentially add to more headwinds on the economy. In fact, that is probably one of the key reasons the Bank of Canada paused its rate hikes, realizing that there will be a period here when many Canadian households will face higher mortgage interest payments as their mortgages are renewed or their rates are reset. They will have to adjust accordingly in terms of their spending patterns.
The key thing to keep in mind as well is that for many years now, the financial systems in originating mortgages.... The government agencies have been insuring them with this notion that there was a stress test, and in some cases a pretty onerous stress test at that. It should be the case that many of these households are now going to face higher mortgage interest payments.
In fact, that scenario has already been played out: Do they have the financial resources to take care of that? Will they have to make adjustments? Will Canadians potentially start eating out a little less, or maybe not go to the theatre as much, or whatever the case may be? The answer is yes. Then again, that is precisely what the mechanism is here: In terms of trying to slow the economy down, to broadly reduce demand, it is to have that happen.
As my colleague Mr. Jean mentioned, the interest rate channel works very effectively in slowing down the Canadian economy for that particular reason.