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“After consulting with the Department of Finance, Manulife Bank has withdrawn the promotional campaign and reverted to our previous posted rate,” the bank said in a statement.

A spokesperson for Mr. Flaherty said the minister was unhappy with the move by Manulife, and instructed Finance staff to tell the bank that its lowered rates would not be tolerated.

That’s Banana Republic behaviour

NDP Leader Tom Mulcair accused Mr. Flaherty of using his position to pressure a private-sector mortgage lender to raise its interest rates, an action that will increase borrowing costs for Canadians.

“That’s Banana Republic behaviour,” said Mr. Mulcair, who added the minister has no business interfering with the free marketplace.

“That company is operating completely with full respect of the law, they see an advantage in attracting clients at this rate, why shouldn’t they go out to do that?” Mr. Mulcair asked.

“It’s none of his business. It’s the minister’s opinion, it’s nuts. We’ve never seen this before.”

Liberal interim leader Bob Rae called the minister’s actions “ridiculous” and a move that would increase borrowing costs for Canadians.

“Either we have a market or we don’t,” he said. “The banks have huge profits. The idea that they shouldn’t be able to give a break to consumers is ridiculous and the idea that the minister of finance would basically be trying to create some kind of a cartel among the banks and the financial institutions as to what they can offer consumers by way of interest rates is, I think, completely inappropriate, completely wrong actually.”