Bank of Canada: Monetary Policy Report—April 2026
The Canadian economy was on track before the war in the Middle East, but rising oil prices have pushed inflation up and created uncertainty. The Bank of Canada estimates the nominal neutral interest rate to be between 2.25% and 3.25%, unchanged from January.
The Canadian economy was evolving as expected before the outbreak of the war in the Middle East. Since the war began, oil prices have risen, pushing inflation up, and the outlook has become more uncertain. Consumer and government spending are supporting gross domestic product (GDP), while US tariffs and related trade uncertainty are weighing on exports and investment. The Bank of Canada estimates the nominal neutral interest rate to be in the range of 2.25% to 3.25%, unchanged from January. Governor Macklem stated that the impact of the Middle East war on overall Canadian growth is expected to be small. Most measures of annual wage growth are between 3% and 3.5%.
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