The finance minister named consumer debt, which is at near record high levels, and a resurgent housing market as the number one domestic threat to the economy in his fall economic update released Tuesday in Edmonton.
In a a question-and-answer session on the update, Flaherty noted that he had acted in the past on an overheated housing market and would do so again if he felt it were necessary.
"We have to watch out for bubbles, always, in markets around the world, including our own Canadian residential real estate market, which we keep a sharp eye on," he said.
"I've intervened four times in the last several years and I'll intervene again if I have to."
The update noted that while the pace of household credit growth has continued to slow, "the recent pick-up in housing market activity, if it reflects stronger underlying momentum, could translate into further debt accumulation."
Flaherty last tightened mortgage rules in July 2012. Although that produced a sharp pull-back in home sales and starts, recent months have seen sales revive and prices continue to climb, although at a more moderate pace than previously.
Many analysts believe the pick-up in the market is a temporary phenomenon caused by prospective homebuyers moving up purchases to get ahead of coming higher interest rates.
But two weeks ago Flaherty called that analysis a theory that could prove wrong. At the time, the finance minister said he was not yet ready to intervene but that he was monitoring the situation closely.
Also on HuffPost