'We're using antibiotics for the common cold': The case for higher interest rates in Canada

Philip Cross rarely deviates from data when talking about Canada’s near-decade run of extraordinarily low interest rates.
But he does indulge one metaphor: “When you’re seriously ill, of course you use antibiotics … they’re designed for emergencies. But we’ve maintained the emergency [measures] for eight years. After eight years, it’s not an emergency anymore.”
The Bank of Canada’s key lending rate is still just 0.5 per cent. The measure has made borrowing ultra-cheap and driven a worrying rise in household indebtedness, says Cross, a fellow with the Macdonald-Laurier Institute.
“We’re using antibiotics for the common cold.”
Since the U.S. Federal Reserve is expected to raise rates on Wednesday, he says it’s an obvious time for Canada to stop overlooking the risks and withdraw the medicine. 

‘We’re using antibiotics for the common cold.’
– Philip Cross, Macdonald-Laurier Institute

Cross was a senior economist with Statistics Canada in 2008 and remembers the sense …