The Bank of Canada made the right decision to raise interest rates, even if it has a negative impact on Toronto’s housing market, according to David Rosenberg, the influential chief economist and strategist at Gluskin Sheff + Associates.

“It’s called the ‘Bank of Canada,’ not the ‘Bank of the Greater Toronto Area,’” Rosenberg told BNN in an interview Wednesday.  “If the bank of Canada was only concerned with Toronto housing coming off the bubble level we had in the spring, they would not have raised rates today.”

The Bank of Canada increased its benchmark interest rate by 25 basis points to one per cent – the second rate hike this year. The central bank boosted interest rates in July for the first time in since 2010. The increase will impact lending rates such as mortgages and lines of credit, as well as interest deposits on bank savings accounts.

Toronto’s once-hot housing market continues to show signs of cooling. The average selling price of homes in the Greater Toronto Area dropped more than 20 per cent from April to August, according to data from the Toronto Real Estate Board.

But while the Toronto housing sector is slowing, the overall Canadian economy is growing fast. Canada’s GDP expanded at a whopping 4.5 per cent in the most recent quarter, leaving the Bank of Canada little choice but to hike rates, according to Rosenberg.

“[The Bank of Canada is] appropriately taking a very eclectic and holistic approach to the national economy,” he said.  “Even with housing plateauing… there are other segments of the economy that are running at a very high level now.”

That growth will be difficult to maintain, but if the Canadian economy continues to create jobs, the Bank of Canada could raise rates again before the end of the year, Rosenberg said.

“The unemployment rate started the year at 6.9 per cent; it’s now 6.3 per cent. If we are down to say six per cent in the next several months, nothing stops the bank from going again.”