As widely anticipated, the Bank of Canada (BoC) kept its benchmark interest rate at 2.25% at its event on Wednesday.
In his press conference, Governor Tiff Macklem said the Canadian economy had shown surprising resilience despite US tariffs, helped in part by recent Statistics Canada revisions that suggested growth had been stronger than previously thought before sanctions took effect. He noted that inflationary pressures remained contained and reiterated the view that GDP would expand at a moderate pace in 2026, with inflation staying close to the 2% target. A temporary uptick in prices was expected in the near term due to last year’s tax holiday, though he stressed that the federal budget was not adding significant additional inflationary pressure and that its eventual impact would depend on the speed and effectiveness of implementation.
Macklem argued that keeping the policy rate near the lower end of the neutral range continued to provide appropriate support for the economy, while emphasising that decisions would be taken one at a time based on incoming data. He also acknowledged the challenge faced by Statistics Canada in measuring economic activity accurately.
Senior Deputy Governor Carolyn Rogers added that the Bank did not want to see prices falling and highlighted a better balance in the housing market, saying another surge in house prices was not expected.
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