Canada Prime Rates

The Prime Rate remains at 4.95% following the Bank of Canada's decision to hold its policy rate steady at 2.75%.

Core inflation has exceeded the Bank of Canada's 2% target, indicating persistent underlying inflationary pressures. However, recent declines in oil prices, combined with the elimination of the consumer carbon tax, are moderating headline inflation in the coming months. Meanwhile, Canadian consumers are showing signs of economic strain.

Bank of Canada Maintains Policy Rate Amid Trade Tensions

• Canada faces significant trade tensions with its largest trading partner, creating economic uncertainty and export disruptions that pose risks to the Canadian economy.
• The impact varies across sectors, with some industries confronting new tariffs while others work to secure USMCA compliance certification to avoid tariffs.
• The economic effects are complex: U.S. tariffs exert a marginally disinflationary impact on Canada, while Canada's retaliatory measures contribute to inflationary pressures.
• Reduced trade activity, weakening business confidence, and potential employment impacts further constrain economic growth, making Canada's economic outlook more challenging.
• The overall reduction in economic activity from these trade tensions is expected to dampen demand throughout the economy, creating broader disinflationary pressure.

The Bank of Canada is diligently analyzing both the magnitude and timeline of inflationary and disinflationary pressures caused by U.S. trade policies before considering any change to its policy rate.

The Prime rate in Canada is currently 4.95%. The Prime rate is the interest rate that banks and lenders use to determine the interest rates for many types of loans and lines of credit. These can include credit cards, HELOCs, variable-rate mortgages, car and auto loans, and much more. If you have any of these loans, changes in the prime rate will also change your debt payments and thus your GDS and TDS ratios.