09/03/2026
🔑 Key Update
The Bank of Canada has held its key interest rate at 2.25%, with the Bank Rate at 2.50% and the deposit rate at 2.20%. Canada’s economy strengthened in the second quarter, with GDP growing 3.3%, supported by solid consumer spending, a rebound in housing activity, and strong gains in exports and business investment. The unemployment rate also edged down to 6.4% in July. However, ongoing conflict in the Middle East, elevated energy prices, and new U.S. tariffs and Canadian counter-measures continue to create uncertainty for the economic outlook.
CPI inflation has been hovering around 3%, largely due to persistently higher gasoline prices. Excluding gasoline, inflation was 2.2%, while core inflation remained close to the Bank’s 2% target in July. With energy prices remaining elevated and new tariffs potentially increasing costs for businesses and consumers, the Bank says upside risks to inflation have increased. For now, it believes the current interest rate remains appropriate and will continue monitoring the sustainability of Canada’s economic recovery and the inflation outlook closely, adjusting monetary policy if needed.
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