The Bank of Canada released on May 13 a summary of its Governing Council’s deliberations that led to the monetary policy decision on April 29, 2026. The meeting was presided over by Governor Tiff Macklem and included Senior Deputy Governor Carolyn Rogers and Deputy Governors Toni Gravelle, Sharon Kozicki, Nicolas Vincent, and Michelle Alexopoulos.
The summary outlines how recent global events, including the war in the Middle East and rising oil prices, have impacted both international and Canadian economic conditions. The Governing Council discussed heightened volatility in energy markets and inflation pressures worldwide. In particular, members noted that higher energy costs had pushed up inflation in many countries while growth prospects for those reliant on oil imports had deteriorated.
In Canada, after a contraction at the end of 2025 due to inventory drawdowns, economic growth was expected to resume in early 2026. Domestic demand remained concentrated in consumer and government spending with business investment still limited by US tariffs and trade uncertainty. Surveyed businesses anticipated cost increases from the conflict but faced challenges passing these costs onto consumers due to soft demand.
The housing market continued to show weakness from both cyclical factors like uncertainty as well as structural issues such as slower population growth. Labour market conditions were described as soft with slow job growth and an unemployment rate between 6.5% and 7%. Inflation had been close to target levels for more than a year but rose slightly in March due to gasoline prices; core measures suggested downward momentum overall.
Governing Council projected gross domestic product (GDP) growth at 1.2% for 2026 with gradual strengthening through subsequent years if current risks do not worsen. Inflation is expected to rise temporarily before returning toward the Bank’s two percent target by early 2027 assuming global oil prices decline as forecasted.
Monetary policy discussions centered on elevated risks stemming from US trade relations and ongoing geopolitical tensions affecting oil prices. Members agreed that while they could look through initial inflation shocks from higher gasoline prices given current slack in the economy, persistent high energy costs or significant new trade restrictions could require changes to interest rates—either tightening or loosening depending on circumstances.
Ultimately, the Governing Council decided to maintain its policy interest rate at 2.25%, considering it appropriate under present conditions but acknowledging possible future adjustments may be needed depending on evolving risks related to trade policies or prolonged high oil prices.
The Bank of Canada strives to maintain price stability and foster economic growth by overseeing monetary policy and financial systems according to the official website. Macklem has served as governor since June 3, 2020; initiatives such as collaborations with university students are part of its educational outreach efforts; it also manages currency systems including digital payments while regulating retail payment systems; overall it operates within the financial sector focusing on oversight responsibilities—all according to information provided by the official website.
