This morning, the Bank of Canada made their first announcement of 2026. As was a highly expected decision, they have decided to hold their policy rate. This means the Prime Rate should remain at 4.45%.

This announcement was coupled with the first Monetary Policy Report of 2026. A complete list of the interest rate announcements and Monetary Policy Reports scheduled for 2026 can be found HERE. 

As has been noted many times, the Bank of Canada is hesitant to make any significant changes to the Monetary Policy Report (MPR) due the the "unpredictable US trade policies and geopolitical risk". 

Monetary policy decisions remain focused on maintaining an inflation rate near the 2% target while also aiding the economy through times of change. Currently, inflation is sitting at 2.4% (as reported in December) and unemployment is at 6.8%. The Bank of Canada has noted that "inflation [is expected] to stay close to the 2% target over the projection period, with trade-related cost pressures offset by excess supply". Unemployment has been hit primarily by US tariffs as sectors saw a significant decrease in production. With the remaining uncertainty surrounding US tariffs, few businesses are showing eagerness to hire more workers in the coming months.

The next policy rate change is influx. Governing Council has reiterated they are ready to make adjustments as necessary but the elevated uncertainty "makes it difficult to predict the timing or direction of the next policy rate change". The upcoming review of CUSMA will be an important marker in forecasting monetary policy. 

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.

Information note

As always, we are here to help. If you'd like to chat about your scenario, make sense of what's going on, or see what options may be available for you, please feel free to book a chat!

The next scheduled date for announcing the overnight rate target is March 18th, 2026.