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Provincial holiday: Alberta, British Columbia, Nova Scotia and Ontario

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%.

Tariffs are significantly higher than they were at the start of 2025, and it is extremely difficult to predict how US trade policy will play out. Canadian economic activity has slowed but is showing signs of resilience. While inflation is close to 2%, underlying inflation has picked up.

With some new tariff agreements in place, the range of trade policy outcomes has narrowed. Nevertheless, the situation remains fluid and difficult to predict. Canada’s economic outlook therefore continues to be highly dependant on assumptions about how US trade policy could unfold.

Because the trade environment remains so uncertain, the path for Canadian growth and inflation is less clear than usual. If the trade conflict were to escalate or de-escalate, those shifts would alter economic outcomes.

US tariffs are significantly higher than they were at the start of 2025, and US trade policy remains unpredictable. Inflation is near 2%, although underlying price pressures have picked up. With uncertainty about US trade policy still high, the outlook for the Canadian economy remains clouded.

Canadian economic activity has slowed considerably because of the trade conflict but is showing signs of resilience. While inflation is close to 2%, underlying inflation has risen to about 2½%.

On Wednesday, July 30, 2025, the Bank of Canada will announce its decision on the target for the overnight rate. A press release will provide a brief explanation of the decision. The Bank will also publish its quarterly Monetary Policy Report (MPR) at the same time as the rate decision. 

Tariffs and trade uncertainty are expected to weigh on Canadian economic activity for some time. Inflation remains close to the 2% target over the scenario horizon.