For the first time in 7 years, the Bank of Canada has raised interest rates. 

This has been speculated for a number of months," explains Ron Areshenkoff, a financial planner with Spectra Financial. "It gets to be a complicated issue but the big issue is debt."

"Canada is one of the most in debt countries in the world. So with higher interests rates, more of people's disposable income will be going to service that debt. That's why governments have been resistant to raise rates or to raise it too fast because you can't afford to sink a bunch of people by increasing their mortgage payments."

He adds that the concern is that people will have less disposable income to spend on consumer good because now that money is going to service their debt. 

"Debt has really helped the economy. Household debt spending over the last number of years whether it is for vehicles or houses or vacations has been good for the economy. The worry always is that a rate hike or a rate hike too fast will slow the economy and hurt the economy. That's why there has been such a resistance to raise interest rates and that's why they want to go slow."

He adds that the Bank of Canada must have felt that the economy is strong enough that they could slowly start to increase interest rates and the economy wouldn't suffer. He also mentioned that because of low interest rates, people have been able to afford larger houses and the days of the "starter home" were gone.

"It's a bit unique that young people in their twenties can get a mortgage and get into a $400,000 house. With low interest rates, people have been able to go into a big house right off the bat."

However, he feels that higher interest rates could be good for those people who have worked and saved for many years. 

"Right now it's a unique period in history because people that worked all their lives and saved a bunch of money really aren't able to survive off interest income off their savings because interest rates are so low."

"Really, the way the system works best is if there is a high enough interest rate, those people who worked a lifetime to accumulate assets can draw an income off their assets and survive."

"Generally they feel that the economy is strong enough right now, employment is strong enough that they can slowly start to increase interest rates and the economy won't suffer too greatly for it."

"We've seen falling interest rate period but we are now going to see a number of years of rising interest rates. I think it was a very unique period that we lived through where interest rates were so low. I think those days are gone for a long, long time."