There were several positive surprises in the latest rate decision report from the Bank of Canada.  

BoC Governor Tiff Macklem reported Wednesday morning that the key interest rate will remain unchanged at 2.25 per cent after it was lowered by a quarter point in October. Macklem says the maintained rate is possible thanks to several favorable economic signals.

“After falling 1.8 per cent due to sharply lower exports, Canadian GDP grew 2.6 per cent in the third quarter. This was much stronger than we expected but largely reflected volatility in trade.”

He expects GDP growth to be weak in the fourth quarter but pick up again in 2026.  

When asked where this resiliency is coming from in light of a barrage of American tariffs, Tiff Macklem says in the grand scheme of things, Canada is one of the least tariffed countries by the U.S. at 6 per cent. 

“We have very steep tariffs on some key sectors in our economy. Steel, aluminum, autos, lumber. For the rest of the economy, it continues to operate largely tariff free with the United States.”

Other positive markers include the third consecutive month of jobs added to the Canadian economy. Unemployment has now fallen to 6.5 per cent, and youth unemployment has come down slightly, though it still remains in the double digits. 

He adds that inflationary pressures continue to be contained despite added costs related to the reconfiguration of trade, and the policy rate has been seized at a level that will keep inflation close to the 2 per cent target while also helping the economy through a period of structural adjustment. If the outlook changes, he says they are prepared to respond.