The BoC left its policy rate unchanged at 2.25%, in line with expectations, and reiterated a neutral bias. The Governing Council said the current setting “remains appropriate,” conditional on the economy evolving broadly in line with its outlook.
The Bank judged that the outlook for both the global and Canadian economies is little changed from the October MPR. However, it cautioned that the balance of risks remains tilted by external factors, particularly “unpredictable US trade policies and geopolitical risks.”
Near-term growth is expected to remain “modest”. Growth forecasts were left broadly unchanged, with GDP expected to expand 1.1% in 2026 and 1.5% in 2027. A major source of uncertainty remains the upcoming review of the Canada-US-Mexico Agreement, which could materially affect trade flows and investment decisions. On inflation, the BoC expects price growth to stay close to its 2% target over the projection horizon
