Bank of Canada Holds Steady


The economic landscape in Canada is continuously evolving, shaped by various domestic and global factors. The latest statement from the Bank of Canada, the nation’s central bank, sheds light on its future monetary policy direction. This article delves into the Bank’s statement, providing a clearer understanding of the forces driving its decisions and the implications for Canadian borrowers.

The Bank’s Intention: A Gradual Approach to Rate Increases

From the Bank’s most recent communication, there’s a clear indication of an intent to raise rates. However, the emphasis is on the term ‘gradual’. Unlike other periods where swift actions might have been necessary due to volatile economic conditions, the Bank seems to favour a more measured approach this time. This gradualism reflects a desire to provide stability and predictability, allowing businesses and households to adjust without causing abrupt market shocks.

The Crux of the Concern: The Price of Crude

Oil, often dubbed ‘black gold’, is a vital commodity for the Canadian economy. With vast reserves, particularly in regions like Alberta, Canada stands as one of the top oil-producing countries globally. However, the fluctuating global price of crude oil has significant repercussions for our economy.

Currently, the low price of crude presents a challenge. Not only does it directly affect the revenues of oil companies and their employees, but its impact trickles down to other sectors, from manufacturing to services. The ripple effect means that various aspects of the Canadian economy feel the pinch when oil prices dip.

Property Market Slowdown: Another Layer of Complexity

Adding to the economic conundrum is the recent slowdown in Canada’s property market. Government interventions, aimed at cooling an overheated housing market and ensuring long-term stability, have produced noticeable effects. While these interventions were necessary to prevent potential bubbles and ensure sustainable growth, they have, in the short term, added another layer of uncertainty to the economic mix.

Economic Capacity: A Silver Lining

On a brighter note, the Bank of Canada’s data suggests that a vast majority – 90%, to be precise – of the economy operates at capacity. This metric means that most sectors are producing goods and services close to their potential, without significant inefficiencies or wastages. This efficient operation bodes well for the country’s economic health and provides some cushion against the aforementioned challenges.

The Bank’s Strategy: Cautious Optimism

In summary, while the Bank acknowledges the existing challenges, its strategy seems rooted in cautious optimism. Recognizing the strengths of the Canadian economy, the central bank appears poised to ensure that the interest rate environment supports sustainable growth. Its “slow and cautious approach to rates” reflects this philosophy, aiming to strike a balance between fostering economic activity and maintaining financial stability.

Seeking Clarity? Reach Out to the Coastal Key Team

Interest rates, economic forecasts, and financial jargons can be daunting. But fear not, the Expert Mortgage Brokers of the Coastal Key Team are here to help. Whether you’re a first-time homebuyer, looking to refinance, or just seeking clarity on the latest economic developments, our team provides the expertise and guidance you need.

For specific queries regarding rates, terms, or any other mortgage-related concerns, please do not hesitate to get in touch. You can reach us directly at 604-588-4466. Alternatively, for those who prefer written communication, drop us an email at We are committed to providing timely, accurate, and tailored advice to suit your individual needs.

The latest statement from the Bank gives every indication it intends to continue raising rates, but it is in no hurry to do so. The key concern appears to be oil.  The low price of crude is seen as a weight on the entire Canadian economy, along with the slowdown in Canada’s property market due to government intervention.

The Bank of Canada figures 90% of the economy is working at capacity and will continue with its slow and cautious approach to rates.

If you have any other questions regarding rates or terms, please give us a call MHC to Increase at 604-588-4466 or send us an email to

The Expert Mortgage Brokers of the Coastal Key Team.