Bank of Canada Announcement – April 2025

The Bank of Canada has held its overnight rate at 2.75%, citing rising global uncertainty, especially around shifting U.S. trade policy and tariffs. Two economic scenarios were outlined: one with limited tariffs and stable inflation, and another involving a prolonged trade war that could push Canada into recession and raise inflation above 3%. Trade tensions and market volatility have weakened consumer and business confidence, slowed economic activity, and disrupted labour market recovery. Inflation was 2.3% in March, with short-term expectations rising due to anticipated cost increases from tariffs. Despite recent oil price declines and the removal of the carbon tax easing near-term inflation, upward pressure from trade disruptions remains. The Bank will proceed cautiously, aiming to support growth while maintaining price stability, acknowledging that monetary policy cannot resolve trade issues but must ensure Canadians continue to trust in long-term inflation control.

The next scheduled date for announcing the overnight rate target is June 4, 2025