David Rosenberg says Canada's housing market in a 'huge bubble'

The recent gain caught the attention of policy makers, including the Bank of Canada, which said housing activity “has been much stronger than expected” in a rate policy statement Wednesday. It held its key short-term rate at 0.25 per cent.

With an unemployment rate of 9.4 per cent in January, the central bank is right not to worry about inflation, Rosenberg said. Statistics Canada reports February jobs data on Friday. “We have an unemployment level in this country that’s higher than it was at the peak of the last two recessions,” he said. “So we still have a very deep, I would say, deflationary hole in the labor market. You can have all the commodity strength in the world. If you don’t have strength in the labor market, you’re not going to get any inflationary impulse.”

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