Bank of Canada to Announce Interest Rate Decision on April 29

For newcomers in Canada, BoC’s policy rate decisions have a direct impact on inflation, which in turn affects the cost of everyday essentials such as food and gas. The rate also impacts mortgage rates, and interest rates offered by banks on other investment or credit products. 

The central bank’s decision to hold rates comes at a time when the war in the Middle East has pushed oil and gas prices sharply higher. This is adding new pressure to an economy already dealing with US tariffs and soft growth. The Bank will also release its quarterly Monetary Policy Report (MPR) alongside the rate decision. 

Key Takeaways 

• The Bank of Canada is expected to hold its policy interest rate at 2.25% on April 29, 2026 

• Inflation rose to 2.4% in March, pushed higher by energy prices tied to the Middle East conflict 

• A Reuters poll of 41 economists found all 41 expected a hold on April 29; more than 80% predicted no change through the rest of 2026 

• Canada’s GDP is forecast to grow just 1.2% in 2026, down from 1.7% in 2025 

Bank of Canada Expected to Hold Interest Rate in April 2026 

Currently, the Bank of Canada (BoC) policy interest rate is 2.25%. Financial institutions and mortgage companies base their own interest rates on the policy rate. 

In March, the Bank held the rate at 2.25%, citing higher volatility in global energy prices and financial markets stemming from the U.S-Israel war with Iran. That same reasoning is expected to carry into April. 

Statistics Canada reported that Canada’s inflation rate rose to 2.4% year over year in March, up from 1.8% in February, driven largely by higher energy prices. While that isstill within the Bank’s 1% to 3% target range, it is a considerable jump. Gasoline prices rose 21.2% in March compared to February, according to Statistics Canada. 

However, analysts have noted that when energy prices are removed from the Consumer Price Index, March inflation was lower than in February. Core inflation measures declined as well, suggesting the price pressure isn’t broad-based, but tied to one volatile input. 

According to a Reuters poll, all 41 economists polled between April 21 and 24 expected the Bank to leave the overnight rate at 2.25% on April 29. 

The Competing Pressures: Economy versus Energy Prices 

Canada’s economy is softening. Employment gains made in the fourth quarter of 2025 were largely reversed in the first two months of 2026. In January and February, the economy lost over 100,000 jobs. The unemployment rate climbed to 6.7% in February and stayed there throughout March. Mortgage delinquencies and insolvencies are also rising. 

Scotiabank’s March forecast projects average Canadian GDP growth of 1.3% for 2026. The bank predicts a rebound to 2.0% in 2027 provided trade tensions ease and exports recover.  

Canadian Federation of Independent Business (CFIB) expects inflation to average 2.9% in the current quarter before gradually easing. Scotiabank, on the other hand, expects inflation to go as high as 3.2% in the second quarter of 2026. They predict inflation to only reach BoC’s 2% target by mid 2027. 

Canada’s free trade agreement with the US and Mexico (CUSMA) is up for renegotiation this summer. Until it is finalized, uncertainty around its future is expected to continue weighing on business and consumer confidence. 

This kind of slowdown would normally push the Bank toward lowering rates. But, given the uncertainty in energy prices and rising inflation, cutting rates could potentially make the situation worse. 

Will BoC Interest Rates Increase or Decrease in 2026? 

While it is hard to predict this with absolute certainty, most economists expect rates to remain unchanged through the rest of 2026. Of the 41 economists polled by Reuters, 80% predicted that BoC will hold rates until the end of year. 

The CD Howe Institute’s Monetary Policy Council has the same expectation. They predict one rate hike in early 2027, pushing the policy rate to 2.5% by April 2027.  

However, not all experts agree. Scotiabank economists predict three rate hikes in the second half of 2026, with the year closing at 3%. 

Other BoC Rate Announcement Dates in 2026 

The Bank of Canada makes rate decisions on eight fixed dates per year. The remaining announcements for 2026 are: 

• June 10 

• July 15 (with Monetary Policy Report) 

• September 2 

• October 28 (with Monetary Policy Report) 

• December 9 

What the BoC Interest Rate Hold Means for Newcomers in Canada 

The Bank of Canada’s policy interest rates affect the interest rate decisions by banks and financial institutions. Changes to BoC rates impact the cost of borrowing, including mortgages, car loans, and lines of credit. It also impacts interest earned on savings and investment products like Guaranteed Investment Certificates (GIC) and High-Interest Savings Accounts (HISA).

A hold at 2.25% means that environment stays roughly stable for now.  

That said, financial institutions often change their offered rates in anticipation of Bank of Canada decisions or based on broader market expectations. For instance, in the last two months, many mortgage lenders hiked rates due the impact of the U.S. war with Iran on bond yields. 

If you’re trying to get or renew a mortgage, it’s a good idea to compare quotes from multiple financial institutions. Start the process early, and once you have a good quote, you can also ask the provider to hold the rate for you for up to 30 days. In some cases, especially if you’re switching providers, you can request a longer rate hold. 

If your mortgage is up to renewal later this year, it is possible that interest rates might increase again in the second half of 2026. Factor those changes into your budget planning. 

BoC rate decisions also have a more indirect effect on the economy, especially on inflation. However, with a rate hold, and other factors like the Middle East conflict in play, inflation is expected to remain high in the coming months.