On July 30, 2025, the Bank of Canada held its target for the overnight rate at 2.75%, with the Bank Rate at 3% and the deposit rate at 2.70%. It was the third hold in a row.
Bank of Canada policy rate, %
What the Bank said
- The Monetary Policy Report used a current tariff scenario plus escalation and de-escalation scenarios instead of a single forecast.
- GDP likely declined by about 1.5% in the second quarter (Q2), mostly because exports reversed after being pulled forward.
- In the current tariff scenario, growth picks up to about 1% in the second half of 2025.
- CPI inflation was 1.9% in June; excluding taxes, it rose to 2.5%.
- High shelter price inflation remains the main contributor to overall inflation, but continues to ease.
What it means for Calgary
No change in rates through the summer means buyers should plan on current mortgage costs. With Calgary inventory at 2021 levels and condo and row prices falling, buyers have the advantage in those segments. The next decision is on September 17, 2025.
Compared with June
At its June 4 decision, the Bank reported first-quarter growth of 2.2%, CPI inflation of 1.7% in April and inflation excluding taxes of 2.3%. By July 30, the picture had shifted: the export rush had reversed, GDP likely fell by about 1.5% in the second quarter, CPI inflation had edged up to 1.9% in June and inflation excluding taxes had risen to 2.5%. Unemployment was 6.9% in June, the same rate cited in June, after rising gradually since the start of the year. The Bank now assesses underlying inflation at around 2.5%.
Canadian inflation, %
Three scenarios instead of one forecast
Because US trade actions remain unpredictable, the July Monetary Policy Report did not give a conventional forecast. In the current tariff scenario, based on tariffs in place or agreed as of July 27, growth picks up to about 1% in the second half of 2025, slack persists in 2026, and growth approaches 2% in 2027. Inflation stays close to 2%. In a de-escalation scenario, growth rebounds faster; in an escalation scenario, the economy contracts through the rest of the year.
Why the Bank held
The Bank cited still-high uncertainty, an economy showing some resilience and ongoing pressure on underlying inflation. It noted that many businesses report costs from finding new suppliers and markets, which could push prices up. It said that if a weakening economy puts further downward pressure on inflation and the upward price pressures from trade disruptions are contained, there may be a need for a reduction in the policy rate.
What it means for Calgary buyers and sellers
For now, borrowing costs are steady, which helps buyers plan. In Calgary, where June inventory reached 6,941 homes and condo and row supply is close to four months, buyers do not need a rate cut to find value. Sellers should not expect lower rates to bring a wave of buyers this summer.
Shelter costs
The Bank said high shelter price inflation remains the main contributor to overall inflation but continues to ease. Calgary’s rising rental supply and easing condo prices are part of that national trend.
Local angle
Global oil prices are close to their April levels, the Bank said, a key factor for Alberta’s energy sector. The next decision is on September 17, 2025.
Other signals in the statement
The Bank noted that longer-term government bond yields have moved up and that Canada’s dollar has appreciated against a broadly weaker US dollar. Five-year fixed mortgage rates tend to follow bond yields, so higher yields can keep fixed rates from falling even while the policy rate is on hold. Wage growth has continued to ease, and several indicators suggest excess supply in the economy has increased since January.
