Mortgage Blog

Bank of Canada Rate Announcement - March 1, 2017

March 1, 2017 | Posted by: Crescent Mortgage Corp.

The Bank of Canada continued its cautious ways this morning keeping its key interest rate target unchanged at 0.50%, a level it has remained at since July 2015.

“The bank’s governing council remains attentive to the impact of significant uncertainties weighing on the outlook,” the BoC stated in a relatively brief rate-setting announcement.

BoC Governor Stephen Poloz has insisted in recent months that a rate cut remains “on the table.”, but most economists are remain convinced the bank’s next move will be a rate increase once the economy improves.

Many economists expect that the 2016 4th quarter growth figures due to be released later this week will indicate the economy grew at an annual rate well above the BoC’s forecast of 1.50%.  The BoC however did identify a number offsetting factors that could result in “persistent economic slack in Canada, in contrast to the United States”.  These included a challenging export environment and a struggling domestic job market.

Canadian businesses are still bracing for the potential negative fallout from whatever U.S. President Donald Trump and Congress do on trade and taxes.  Proposals have been made for a border adjustment tax that would penalize foreign goods, a lower U.S. corporate tax rate, new Buy American restrictions and the renegotiation of NAFTA. Any of these could inhibit exports to our southern neighbours.

The BoC’s next rate announcement is set for April 12th.

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