The Bank of Canada released on May 13 a summary of its Governing Council deliberations leading 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 the council’s discussion of global economic developments, notably the impact of the ongoing war in the Middle East. Members noted that this conflict had led to higher global oil prices and increased volatility in energy and financial markets. These factors contributed to higher inflation internationally while growth prospects weakened for countries dependent on energy imports.
In their review of domestic conditions, council members observed that after a contraction at the end of 2025, Canadian economic growth appeared to have resumed in early 2026. Growth was mainly driven by consumer and government spending. However, uncertainty around United States trade policy continued to affect business investment and exports. Results from the quarterly Business Outlook Survey indicated improved business sentiment despite these uncertainties.
Council members discussed challenges facing Canada’s housing market such as slower population growth and affordability issues. The labour market remained soft with low job growth rates and participation declines due to demographic trends. Inflation had been near two percent for over a year but rose to 2.4% in March due to gasoline price increases linked to geopolitical tensions.
The council agreed that future economic performance would depend heavily on U.S. trade policies remaining stable and an eventual decline in oil prices—both subject to ongoing uncertainty from international events like the Middle East conflict.
Members decided it was appropriate to maintain the policy interest rate at 2.25%, noting that moderate economic growth is expected along with inflation peaking near three percent before returning toward target levels if oil prices ease as anticipated. They also acknowledged elevated uncertainty: “Members agreed they could look through the initial impact of the war in the Middle East on gasoline prices.” Future adjustments may be needed if U.S.-Canada trade relations change or if high oil prices persist longer than forecasted.
Accordingly, Governing Council committed to monitoring developments closely: “Governing Council remained ready to respond as needed as the outlook evolved.” The Bank operates within Canada’s financial sector focusing on monetary policy oversight; it manages currency systems including digital payments while collaborating with university students through educational initiatives like monetary policy simulations—according to its official website. Macklem has served as governor since June 3, 2020.
