06/07/2017 09:11 EDT

Canada's Mortgage Rules Need To Be Even Tougher, OECD Says

Toronto and Vancouver house prices pose a risk to the country, think tank argues.

PARIS — A Paris-based economic think-tank is calling on Canada to do more to address risks associated with high-priced housing markets in cities such as Toronto and Vancouver.

The Organization for Economic Co-operation and Development suggests that there should be further tightening of macro-prudential measures undertaken last year.

Those measures included new standards for federally regulated lenders and mortgage insurers, among other things.

For the broader economy, the OECD estimates Canada's gross domestic product will grow by 2.8 per cent this year, double last year's 1.4 per cent growth in GDP.

The new estimate would put Canada's economic growth this year ahead of the United States, which the OECD estimates will have GDP growth of 2.1 per cent this year.

The new OECD estimate is also above the Bank of Canada's most recent forecast of 2.6 per cent growth in 2017.

Overall, the OECD's latest world economic outlook projects global growth of 3.5 per cent this year and 3.6 per cent in 2018, up from 3.0 per cent in 2016.

The Paris-based OECD, whose members include Canada, the United States and many of the world's richest economies, said businesses and consumers are increasingly confident and employment and trade are recovering.

OECD chief economist Catherine Mann said, however, that "policymakers cannot be complacent.'' There is uncertainty over government policies in major countries and wages are not yet growing as much as hoped.

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— With files from The Associated Press

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