One of the biggest names in Canadian investing says that the Bank of Canada acted “far too late” on raising interest rates and that the country’s housing markets still has room to fall.

Stephen Jarislowsky, the billionaire investor and founder of Montreal-based Jarislowsky Fraser told BNN in an interview that the Bank of Canada’s move to raise interest rates last week – its second this year – came too late to stem questionable foreign investment.

“The acceleration of our interest rate, of course, was necessary. It was far too late,” Jarislowsky told BNN. “The housing boom should have been stopped and we shouldn’t have allowed foreigners to buy houses with money which I’m not sure how clean it was. That should have been stopped way before and now these increases in the interest rates are making it even more attractive for foreigners to buy our bonds when they don’t want to buy American bonds anymore.”

The elevated loonie, which hit two-year peaks in the wake of the interest rate move, is also hurting the economy, Jarislowsky argues. Instead of being a beacon of domestic strength, it’s attracting foreign investment worries about the current economic and political climate in the U.S.

“Many, many countries are afraid of leaving their money in the United States and are changing it into other currencies which is the main thrust under the Canadian dollar as far as I can see and we’re going to put ourselves outside of the market where we can compete,” Jarislowsky said.

“The most dangerous thing right now is what’s happening with the Canadian dollar because very few export companies have 10 or 12 or 15 per cent margins on their sales and what is happening with the American dollar is something that is universal,” he said.

As for housing, Jarislowsky believes that the slide in real estate prices still has further to go and that foreign investors have merely started moving their money out of Toronto and Vancouver and into other markets, such as Montreal.

“I think [the housing market] will go down further,” Jarislowski told BNN. “When you remember the American breakdown of the housing market, it went much deeper. You don’t stop at the mid-point, you go much deeper. In the long run housing can only go up by the productivity of the country plus inflation. We have by far surpassed that rate of housing price increase and we’re still allowing housing prices to increase by allowing foreigners to buy. Now they are actually also buying in Montreal.”