The governor of the Bank of Canada said Tuesday that the new mortgage rules introduced by the federal government will ensure a better quality of household debt.

Speaking at a news conference, Stephen Poloz said that the level of debt could be the same, but the rules will mean that those mortgages will be less likely to default and therefore lower the vulnerability to the financial system.

The governor would not be drawn on how the new rules might affect the housing market, other than to say that “resale activity is expected to be lower.”

Mr Poloz also spoke of the renewal of the long-term agreement with Ottawa which has maintained a steady inflation target. He said that the policy has worked and that its renewal gives consumers and businesses confidence in their spending and investing plans.

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