This morning, the Bank of Canada made their third announcement of 2026. Their decision to hold the policy rate was well inline with market expectations. This means the Prime Rate should remain at 4.45%.

As indicated in our previous announcements, the Prime Rate directly impacts those who hold variable or adjustable rate mortgages, as well as those with secured or unsecured lines of credit. These rate announcements do not have a direct correlation to fixed rate mortgages, as fixed rates are priced against the bond market. If you're unsure whether you're impacted by this announcement, please reach out or book a time to chat HERE.

This announcement carried a similar tone to the last. There is still plenty of uncertainty surrounding the national and global economy as a result of the Iran War and tariff implications. This tone is also felt in the Monetary Policy Report (MPR) published alongside today's announcement. Before we review the highlights from the MPR, let's touch on a couple of data points that were discussed in this rate announcement: 

CPI Inflation

CPI inflation did climb to 2.4% in March largely in part due to higher gasoline prices. As noted by the Bank of Canada, this increase 'follows several months of slowing inflation data'. While there is concern that the increased fuel costs will spill over into other goods and service prices, there is little evidence thus far that this has taken place. The Bank of Canada has noted that this does warrant close attention in the coming months - especially as the nation continues to experience elevated food price inflation. 

Unemployment

There has also been subdued employment growth over the past 12 months, particularly in tariff vulnerable sectors. This has continued to result in a soft labour market with unemployment rates continuing to float around the 6.5% to 7% range. There is simply weak hiring and fewer job seekers.

As for the Monetary Policy Report (MPR), the Bank of Canada notes that prior to the war in Iran, 'the Canadian economy was evolving as expected. Since the war began, oil prices have risen, pushing inflation up, and the outlook has become more uncertain.' Just this morning, the Brent Crude oil price is valued at over $118/barrel - up over 6% today and up from $101 on April 1st. While the higher cost of oil will be largely felt at the pump, since Canada is a net exporter of oil, this will have a positive impact on the national income. Overall, Canada is expected to fare better than many countries.

Canada's economic outlook is relying heavily on key assumptions: tariffs remain unchanged and oil prices decline from US$90/barrel in the 2nd quarter of 2026 to US$75/barrel by mid 2027. There is also significant uncertainty surrounding the review of CUSMA. The overall outlook will hinge crucially on the persistence and overall outcome of the Iran War. Unfortunately, only time will tell. 

What does this mean for folks interested in entering the real estate market or those actively house hunting? 

Well, interest rates have remained relatively unchanged through the month of April. This means, qualification overall has remained unchanged. If you're one of the many Canadian's sitting on the sidelines waiting for the sign to wade into the housing market, consider the discussion surrounding housing supply. It's not a secret that Canada will experience a housing shortage as more folks look to enter the housing market; especially when it comes to single family dwellings. As demand eventually increases and supply remains relatively the same, we will likely re-enter a market of elevated housing prices and increased competition.

We understand there may still be many questions and concerns amongst our clients and partners. As part of our commitment to providing the most up to date information and comprehensive support, we provide our very own Canadian Mortgage App. Interested in potentially refinancing to make your monthly payments more comfortable? Click HERE to download the app and run various scenarios to see what the best fit may be. 

FULL BANK OF CANADA RATE ANNOUNCEMENT

FULL MONETARY POLICY REPORT

Information note

As always, we are here to help. If you'd like to chat about your scenario and see what options may be available for you, let us know! We will keep you updated as we receive more information about today's announcement. The next announcement is scheduled to take place on June 10th, 2026 and the next Monetary Policy Report on July 15th, 2026.