OTTAWA—The International Monetary Fund is warning about the risks to the Canadian economy due to a possible correction in the housing market and urged governments to do more to protect against them.

In the preliminary findings of its annual review of the Canadian economy, the IMF said Wednesday that a further tightening of macroprudential and tax-based measures to mitigate speculative and investment activity should be considered.

It also called for greater co-ordination between federal and provincial regulators as well as government efforts to collect more comprehensive data on real estate transactions.

Finance Minister Bill Morneau said there were no surprises in the IMF warning.

“What the IMF has said is ... that there’s a level of household indebtedness in Canada that is significant, something for us to watch. The housing market, of course, is something we’re paying close attention to,” he said.

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Ottawa has moved several times in recent years to tighten mortgage lending rules, including expanded stress tests on mortgages.

A foreign buyer tax of 15 per cent was implemented in the Vancouver region last summer, while Ontario recently announced plans for a similar levy for the Greater Toronto Area.

Moody’s Investors Service recently downgraded Canada’s six big banks amid concerns about consumer debt and housing prices that could leave them vulnerable.

Cheng Hoon Lim, the IMF’s mission chief for Canada, said there are a few policies that could help deter speculation in the housing market and alleviate concerns about rising debt burdens.

“Among these measures, a cap on household debt to income or more stringent qualification criteria for household debt above a certain threshold will go directly to addressing household indebtedness,” she said.

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The IMF also encouraged B.C. and Ontario to replace their foreign buyer taxes.

“This could include a combination of prudential and tax-based measures that discourage speculative activity without discriminating between residents and non-residents,” it said.