Monetary Policy Report—January 2026
Data available as: CSV, JSON and XML Data available as: CSV, JSON and XML Available as: PDF Overview US tariffs and the unpredictability of future trade arrangements are disrupting the Canadian…
Overview
US tariffs and the unpredictability of future trade arrangements are disrupting the Canadian economy. Growth in Canada is expected to remain modest, while inflation stays close to 2%.
Current conditions
The Canadian economy continues to evolve as expected. Average quarterly growth was subdued in 2025, weighed down by US tariffs and slowing population growth. CPI inflation remains near the 2% target.
Tariff and other assumptions
US tariffs remain elevated. The future of trade in North America continues to be highly uncertain.
Outlook
US trade restrictions have disrupted the Canadian economy, leading to structural adjustments that will take time to unfold. Economic growth is expected to remain modest. Excess supply roughly offsets upward cost pressures over the projection horizon, keeping inflation close to the 2% target.
Global economy
Global growth is expected to remain solid, supported by the boom in investment in artificial intelligence and by fiscal stimulus in several major economies.
Projections
The outlook for the Canadian economy is evolving largely as anticipated. Economic growth is expected to average around 1¼% over the projection horizon, and inflation remains near 2%.
Risks
With geopolitical uncertainty elevated and Canada’s trade agreement with the United States and Mexico under review, risks around the outlook are unusually high.
In focus
How Canadian businesses are adapting to US tariffs
Canadian businesses continue their efforts to expand exports to countries other than the United States. Trade tensions are also leading Canadian businesses to rely less on US imports.
The review of the Canada–United States–Mexico Agreement
The future of Canada’s trade agreement with the United States and Mexico is unclear. A review of the agreement could lead to many possible outcomes, and these can have a wide range of impacts on the Canadian economy.
The Monetary Policy Report is a product of the Governing Council of the Bank of Canada: Tiff Macklem, Carolyn Rogers, Toni Gravelle, Sharon Kozicki, Nicolas Vincent, Rhys Mendes and Michelle Alexopoulos.In brief: Monetary Policy Report
Learn about Canada’s inflation-control strategy, the objective of Canada’s monetary policy and the main instruments used to implement it. Our Valet API is designed to help you integrate your applications and processes with our data. For details, please see our documentation.Bank of Canada maintains policy rate at 2¼%
The Bank of Canada today held its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. Content Type(s): Press, Press releasesMonetary Policy Report Press Conference Opening Statement
Governor Tiff Macklem discusses the Monetary Policy Report and the key issues involved in the Governing Council’s deliberations about the monetary policy decision. Content Type(s): Opening statements, Press, Speeches and appearancesPress Conference: Monetary Policy Report – January 2026
Release of the Monetary Policy Report – Press conference by Governor Tiff Macklem and Senior Deputy Governor Carolyn Rogers (10:30 (ET) approx.).
Content Type(s): Press, Speeches and appearances, WebcastsISSN 1490-1234 (Online)
Figures reflect the source report and its stated period. This article is for information and is not investment advice.
