The Bank of Canada held its policy rate at 2.25% on September 2, 2026, continuing a stretch of unchanged rate decisions that dates back to late 2025.
The decision wasn’t particularly surprising. What’s more interesting is the economic push and pull happening behind it.
Watch my video or read on for more details:
The Bank of Canada is dealing with competing pressures.
On one side, inflation remains a concern. Higher energy prices related to the ongoing conflict in the Middle East have kept headline inflation elevated, while new U.S. tariffs and Canadian counter-tariffs could increase costs for businesses and consumers.
On the other side, the Bank of Canada still sees excess supply in the Canadian economy, and uncertainty around trade could threaten the economic recovery. Raising rates too soon could put additional pressure on growth.
Why Energy Prices Matter
Energy prices affect much more than what you pay at the gas station.
When oil and fuel costs stay high, transportation and production become more expensive. Those costs can eventually work their way into the prices Canadians pay for other goods and services.
So far, the Bank of Canada says there has been little evidence of higher energy costs spreading broadly through inflation. But the longer prices remain elevated, the greater that risk becomes.
Will The Bank Of Canada Raise Rates?
It’s possible.
My view is that we could eventually see rates move higher if inflation becomes persistent. That doesn’t mean I expect an increase at the next announcement, and nobody knows exactly when they will move the rates.
The Bank of Canada itself has said it is watching both the sustainability of Canada’s economic recovery and the inflation outlook and is prepared to adjust monetary policy as needed.
What Does The Bank of Canada Rate Mean For Your Mortgage?
If you have a variable-rate mortgage, future Bank of Canada decisions are particularly important because variable rates are tied to lenders’ prime rates.
Fixed mortgage rates work differently and are influenced more heavily by bond yields. That means fixed rates can move even when the Bank of Canada leaves its policy rate unchanged.
For borrowers, the question isn’t simply whether rates will rise or fall. It’s how much uncertainty you’re comfortable carrying and what type of mortgage fits your budget.
Whether you are preparing to buy your first home or your fifth, if you’re looking to get pre-approved for a mortgage in Edmonton, fill out my online application. I’m here to help you every step of the way.
About Jason Scott, Edmonton Mortgage Broker
Looking for a personalized mortgage solution? As an Edmonton Mortgage Associate, I’m trusted partner who will help you get the right mortgage for your home or investment property. I’m Jason Scott, and I’ll be your Mortgage Broker in Edmonton.
