Economic growth has ticked up in Canada, boosted by past cuts in interest rates. In the absence of new tariffs, growth is forecast to strengthen, and inflation remains close to 2%. But the threat of new tariffs is causing major uncertainty.
Trade policy assumptions
The economic outlook presented in this Monetary Policy Report does not incorporate any new US tariffs, although it does recognize that the threat of tariffs is already affecting financial markets and business decisions. This assumption reflects a situation that is evolving rapidly, along with the high degree of uncertainty around whether wide-ranging tariffs will be imposed and the specifics of those tariffs and any possible retaliation. A detailed discussion of how the Canadian economy could be impacted if significant new tariffs were to be imposed, including an illustrative scenario, can be found in In focus: Evaluating the potential impacts of US tariffs.
Overview
Inflationin Canada has been around 2% since …
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