Pace Governor Poloz, the Canadian housing bubble does have implications for the inflation target. Homeowners’ replacement cost made a bigger contribution to the April annual inflation rate than any other component except for gasoline. However, at 3.9%, down from 4.0% in April, it doesn’t seem to properly reflect the national surge in housing prices, even given these are lagged data, actually reflecting the difference in February and March inflation rates. The Teranet National Bank HPI had an inflation rate of 13.5% in March, up from 13.4% in February.  The other owned accommodation expenses inflation rate of 3.5%, down from 3.6% in March, while it looks impressive, also likely badly underestimates actual inflationary pressures. Poloz will never complain about this underestimation, because he doesn't want to raise interest rates and he wants to keep driving the loonie down.