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The recent financial crisis and global economic slowdown have renewed interest in monetary policy options when the policy interest rate is at or near zero.

Results from the Business Outlook Survey and the Business Leaders’ Pulse continue to signal weak demand, which is weighing on investment and hiring plans. While few firms are planning layoffs, labour markets are widely seen as continuing to soften. Although they remain above average, wage and inflation expectations are easing. Most firms that made abnormally large price increases in the past 12 months do not plan to do so again in the coming year.

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The "pretended" Bank of Upper Canada — Kingston (1819-22)

The note is part of the National Currency Collection of the Bank of Canada.
Photography by Gord Carter

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Silver Presentation Salver

The salver, which was bequeathed to the Bank of Canada by Lady Macmillan in 1967, is part of the artifact collection of the Bank of Canada Archives.
Photography by Mone Cheng, Innovacom, Ottawa.

As the economy reopens after the third wave of COVID-19, growth should rebound strongly. The Bank is forecasting growth of about 6 percent this year, slowing to about 4 ½ percent in 2022 and 3 ¼ percent in 2023.

Economic growth and inflation in Canada in the first half of this year have been stronger than was expected in the April Monetary Policy Report. The Bank judges that the economy is now operating further above its production potential than was projected in April.

Core inflation has been higher than anticipated in recent months. This reflects not only a stronger-than-expected increase in premiums for auto and home insurance, but also some broadening of price pressures resulting from strong demand in the economy.

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Brass Cash Register, 1910

The register is part of the National Currency Collection, Bank of Canada.

Photographed by Gord Carter, Ottawa.

Let me state at the outset that the speed and synchronized nature of the recent global downturn has resulted in a heightened degree of uncertainty, which is evident in the diverse views on the outlook.

Results of the third-quarter 2025 survey show that tariffs and trade tensions continue to affect consumers' perceptions about their financial health and spending plans. The CSCE indicator rose modestly from its most recent low, improved by slight gains in financial health and household spending intentions. But perceptions of labour market conditions deteriorated further, driven in part by a sharp drop in job-finding prospects for public sector workers. Consumers’ short-term inflation expectations remain above their pre-pandemic averages, and expectations for longer-term inflation have picked up again.