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Bank of Canada Update: What You Need to Know After the March 20 Speech
March 22, 2025
On March 20th, the Governor of the Bank of Canada delivered a speech that gave us a clearer picture of what’s on the horizon for the Canadian economy—and what it could mean for interest rates and mortgages.
If you don’t have an hour to watch the whole thing, here’s a quick and easy summary of the key takeaways.
The Big Picture: A Strong Finish, A Shaky Start
We wrapped up last year in a pretty good place. Inflation was easing, interest rates had started to come down, and the economy was showing signs of healthy growth.
But now, we’re facing a new challenge: U.S. tariffs on Canadian exports.
These new tariffs are already impacting major sectors, and they’re creating serious uncertainty about what comes next.
Which Canadian Sectors Are at Risk?
Here’s a breakdown of who could feel the impact the most:
- Oil sector (Alberta): New tariffs on oil could lead to reduced revenues and slower investment.
- Farmers (Prairies): Products like canola are now facing higher trade barriers, increasing costs and limiting market access.
- Manufacturing (Ontario and Quebec): Tariffs on steel and aluminum could slow down production and growth in these key sectors.
What makes it worse is the unpredictability. The U.S. keeps adjusting its stance, which makes it hard for Canadian businesses—and policymakers—to plan ahead.
The Bank of Canada’s Role
The Bank’s main focus remains the same: Keep inflation under control without adding more pressure on households and businesses.
The Governor mentioned that they are listening closely to feedback from Canadians and will continue adjusting their approach with care.
In simple terms: They’re paying attention, but they don’t have a crystal ball either.
What About Interest Rates?
This part’s important—especially if you have a mortgage.
🔹 Variable Rates: Right now, the Bank is expected to hold rates steady at its next announcement on April 16th. But if inflation starts to rise again, they’ve made it clear they won’t hesitate to raise rates to keep it in check.
🔹 Fixed Rates: Here’s some good news: we’ve seen some small fixed-rate decreases over the past week. That’s encouraging for anyone looking to buy, renew, or refinance.
Another interesting factor: The removal of the federal carbon tax from consumer prices could reduce inflation by about 0.5%, which might ease pressure on the Bank to hike rates.
What Should You Do Now?
If you’re a homeowner or planning to become one, here are a few tips:
- If you have a variable-rate mortgage, keep an eye on inflation and upcoming Bank of Canada updates.
- If you're shopping for a fixed-rate mortgage, you might be able to take advantage of lower rates right now.
- If you’re unsure how this impacts your situation, reach out—I’m happy to help you understand your options.
Final Thoughts
The economic outlook is a bit foggy right now, especially with trade tensions and unpredictable policies south of the border. But the Bank of Canada is proceeding cautiously, and we’re here to help you do the same.
If you want to talk through how these changes might impact your mortgage or buying plans, feel free to contact me directly. It’s always better to plan ahead than react later.
Tariff Fatigue and the Likely Bank of Canada Rate Cut
March 07, 2025
Hey everyone,
I don’t know about you, but I have major tariff fatigue. The constant back-and-forth has made it exhausting to keep up with market movements.
This week, bond yields dropped following the implementation of tariffs on Tuesday. Then, when the news broke that the tariffs were off again, we saw a slight rally. However, the overall uncertainty has kept both the Canadian and U.S. markets trending low.
Adding to the economic picture, Canada’s latest unemployment figures were released this morning. The rate remains unchanged from the previous month at 6.6%. While this isn’t a dramatic shift, it does contribute to the broader uncertainty affecting the economy.
What Does This Mean for Interest Rates?
The combination of tariff instability and stagnant unemployment numbers has increased the probability of a Bank of Canada rate cut to 80%.
With the next Bank of Canada meeting scheduled for March 12th, all signs point to a 0.25% decrease in the overnight rate. If that happens, we can expect some movement in mortgage rates and borrowing costs.
What Should You Do?
If you’re in the market for a mortgage or thinking about refinancing, now is a great time to review your options. A potential rate cut could mean lower payments, but it’s important to stay informed and act when the time is right.
As always, if you have any questions about how this might affect your mortgage, feel free to reach out!
Tips to navigate rates and economic uncertainty
February 06, 2025
With tariffs on the horizon, no one really knows how this is going to play out, so if you must choose a mortgage now, here are some tips to help navigate that uncertainty.
1)If you are risk tolerant, variables are the more flexible option, giving you a wait and see product because of the ability to lock into a fixed rate if desired. You can choose a fixed payment variable, that keeps you in control of the payment.
2)As we brace for economic turbulence, anyone who may need more liquidity should consider adding a secured line of credit in behind the mortgage
3)For those who want to maximize cash flow, look at extending your amortization, you can always bring the amortization back down later by increasing your payments or making lump sums on the mortgage
4)Always consider the intent of the property, and how long you may hold the property when looking at term length
Tariffs, Inflation, and Rates
January 24, 2025
Tariffs, Inflation, and Rates: What Does It All Mean for You?
There are a lot of conflicting predictions in the air these days. Headlines are buzzing with terms like tariffs, inflation, and interest rates, leaving many of us wondering: What does it all mean for our wallets? Let’s break it down.
Tariffs and the Economy: A Potential Storm
If Canada does face tariffs from the U.S., it could be economically devastating. While the thought of an economic crisis is daunting, there is a silver lining. Our provincial premiers are uniting to stand up against these threats, and their retaliatory plans showcase the strength of Canadian leadership. This collective effort fills me with Canadian pride.
Of course, tariffs almost always lead to inflation, but the key question is: How much will the economic slowdown offset that inflation? Only time will tell, but it’s something we should all keep an eye on as 2025 unfolds.
Inflation: December’s Numbers Explained
For December, Canada’s inflation rate came in at 1.8%. This drop was largely due to a tax break that resulted in lower prices on restaurant-prepared food and alcohol purchased in stores. However, shelter costs—which include mortgage interest and rent—continue to be the main driver of inflation. This is a significant factor for anyone navigating the housing market or managing their monthly budgets.
Interest Rates: A Glimmer of Relief?
On the topic of rates, the Bank of Canada is expected to lower its benchmark rate by 0.25% on January 29th. Looking ahead, the market is pricing in a total decrease of 0.50% to 0.75% throughout 2025. If a recession is indeed on the horizon, this could mean continued drops in variable interest rates, providing some relief to homeowners with variable-rate mortgages.
If you’re curious about how these rate changes might impact your mortgage, I’ve got you covered. I now offer a free mortgage calculator app that allows you to:
- Explore different payment scenarios.
- See how increasing payments could affect your mortgage.
- Perform quick pre-qualification calculations.
You can find the link to download the app on my website.
Final Thoughts
While the economic landscape is uncertain, staying informed and proactive is the best way to navigate it. Keep an eye on these developments, and don’t hesitate to reach out if you have questions about how these changes might affect your financial goals. Together, we can weather whatever comes our way and make the most of the opportunities that arise.
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