We can do little in Newfoundland and Labrador to address the disparity between our local economy and the national economy. As a country, we may have experienced significant job growth and a strong economy. The problem is that this is primarily being driven by such provinces as Ontario and British Columbia. However, two provinces does not a country make.
In Newfoundland and Labrador, and similarly in Alberta, our economies have been badly hit by the huge drop in the price of oil and its subsequent effect on jobs in both provinces. As a result, many workers have returned home, have to live on minimum wages or no wages at all, and many have been forced into bankruptcy.
Now to the main point of this letter. When the Bank of Canada sets the prime interest rate, there is no advance notice. They would have made the decision ahead of the announcement, but they don’t tell anybody. So, the rate increases as soon as the announcement is made and instantly the banks react and up goes the variable mortgage interest rate. We, as consumers, are hung out to dry! If we lock in our mortgage rate before the announcement and the rate doesn’t rise, we are stuck with the increased payments. Conversely, if we don’t lock in and the rates do increase, then again we get hit with the increased payments. This is totally one-sided, unfair to homeowners and clearly protects the interest of the banks, and not consumers.
Why can’t the system be changed to give us 30 days to make up our minds, after the rate announcement is made?
Bank profits have increased about tenfold — yes 1,000 per cent in the last 10 years, give or take. Where is the justice?