The Bank of Canada held its policy rate at 2.25% in April 2026 while CPI inflation rose to +2.4% YoY in March and is expected to approach ~3% near term, reflecting energy-driven price pressures alongside modest growth.

• The overnight rate was maintained at 2.25% (Bank Rate 2.5%, deposit rate 2.20%), indicating a continued pause in policy as the Bank assesses uncertainty from geopolitical developments and trade policy shifts.
• Canadian GDP is projected to grow +1.2% in 2026, rising to +1.6% in 2027 and +1.7% in 2028, showing a gradual recovery path with growth slightly above potential as excess supply is absorbed.
• Economic activity is supported by consumer and government spending, while exports and business investment remain constrained by tariffs and trade uncertainty, pointing to uneven growth drivers.
• The labor market remains soft, with subdued employment growth and unemployment in the 6.5%–7.0% range, reflecting weak hiring conditions and job losses in tariff-exposed sectors.
• CPI inflation increased to +2.4% YoY in March following earlier easing, driven largely by higher gasoline prices, indicating a reversal in the prior disinflation trend due to energy costs.
• Core inflation has remained just above 2% and broader price pressures have eased, with a declining share of CPI components rising above 3%, suggesting limited pass-through beyond energy so far.
• Inflation is expected to rise further to around 3% in April before returning to the 2% target early next year, based on the assumption that oil prices decline, indicating a temporary energy-driven inflation spike.
• Global growth is projected at ~3% through 2026–2028, but higher energy prices and geopolitical risks are expected to weigh on activity in oil-importing economies while lifting inflation globally.
• Monetary Policy Report: April 2026