Saturday March 14, 2026 | NATIONAL [11:01 am | Updated 1:31 pm PT]
Analysis by Mary P Brooke | Island Social Trends [ See March 18, 2026 rate announcement]
In their upcoming March 18 interest rate announcement the Bank of Canada is widely expected to hold their policy interest rate at 2.25%.
There is continued uncertainty in the economy — precipitated by the trade war launched by the United States against Canada last year, but also due to weaknesses in the Canadian economy that have resulted in low productivity and weak investment for decades.
In the last few rate announcements uncertainty has been the key reason stated by the Bank of Canada for not adjusting the rate up or down. see: January 28, 2026 rate announcement | December 10, 2025 rate announcement
Possibly bold:
However, even though the economic world has been surprised by yesterday’s news that the number of jobs in Canada dropped precipitously in February 2026, the Bank of Canada might choose to be bold and lower the interest rate so that some businesses have increased opportunities for borrowing to support their enterprises.
Fiscal policy:
The Bank of Canada has only one blunt tool — the pegging of the key interest rate.
One economist said in national news this week that the federal government could work with fiscal policy to better support the economy in these challenging times.
Prime Minister Mark Carney is clearly taking the long-view on guiding Canada’s economy with macro-level adjustments that involve complex mixes of budget with ‘dual purpose’ development (e.g. roads and other infrastructure in the north that will support both national defence expansion and the development of communities) and strategic trade diversification. The overall approach is essentially asking Canadians to hang on while the big picture shifts.
“The government is very focused on growing this economy – immediate measures but also the confidence and investment in the country that’s more independent, diversifying our partnership, building first and foremost at home, and secure abroad,” said Carney today during a press conference in Oslo where he is developing strategic alliances with Norway.
Consumer affordability:
Many consumers are struggling to make ends meet, including the reconsideration of core essentials like groceries or medications in order to pay for other essentials like rent or put gas in their car.
Anyone without a secure steady income is likely considering many other affordability adjustments as well including clothing, house or car repairs, digital data package levels, or travel.
These are significant lifestyle adjustments at a very basic level. Family ajnd household well-being is in the balance for many, especially where there is only current income to reply on (without assets to fall back on).
It’s unclear whether the dire situation of income shortfall and income inequity for many Canadians is actually understood by policy makers and financial institutions.
While noting that the federal government has launched as increase in the GST/grocery rebate, the government also could try to make things easier for small business and consumers by directing credit card companies to lower their interest rates.
===== RELATED:
- Bank of Canada holds interest rate at 2.25% (January 28, 2026)
- Bank of Canada interest rate expected to remain at 2.25% on Jan 28 (January 26, 2026)
- NEWS SECTIONS: BANK OF CANADA | AFFORDABILTY | BANKING & FINANCE| TRADE DIVERSIFICATION | POVERTY REDUCTION