These projections are not forecasts of what will happen, of course, but they provide an early warning of what could happen, to help us all better understand the downside risks that could generate stress in the Canadian financial system. Consumer difficulties with rising mortgage payments can also lead to wider problems with other consumer loans, such as credit card debt.
Finally, the argument that fiscal policy should be used to stimulate internal demand and imports overlooks the fact that public finances in surplus countries are also strained and that ambitious consolidation efforts are required in these economies as well to restore the sustainability of public budgets.