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This is an account of the deliberations of the Bank of Canada’s Governing Council leading to the  monetary policy decision on April 16, 2025.

The Bank of Canada today maintained its target for the overnight rate at 2.75%, with the Bank Rate at 3% and the deposit rate at 2.70%.

The Canadian economy ended 2024 in a strong position. However, the trade conflict and tariffs are expected to slow growth and add to price pressures. The outlook is very uncertain because of the unpredictability of US trade policy and the magnitude of its impact on the Canadian economy.

Governor Tiff Macklem discusses the Monetary Policy Report and the key issues involved in the Governing Council’s deliberations about the monetary policy decision.

Business conditions have deteriorated due to the trade conflict with the United States, according to results from the Business Outlook Survey and the Business Leaders’ Pulse. Sales outlooks have softened, particularly for exporters. Firms reported having sufficient capacity, and many are delaying investment and hiring decisions amid uncertainty. Firms expect that widespread tariffs would raise costs and lead to higher selling prices. In this context, expectations for inflation are higher than they were last quarter.