Policy / Oil & Gas /
Bank of Canada holds at 2.25%, citing energy prices and new U.S. tariffs
The policy rate stayed at 2.25% for a second meeting running on September 2; the Bank cited second-quarter GDP growth of 3.3%, inflation near 3% on energy prices and newly announced U.S. tariffs with Canadian counter-measures.
The Bank of Canada held its target for the overnight rate at 2.25% on September 2, 2026, with the Bank Rate at 2.5% and the deposit rate at 2.20%, the same decision it took on July 15 [1][2]. The statement described a broadening recovery, with second-quarter GDP up 3.3% and unemployment at 6.4% in July, but said upside risks to inflation had increased: headline CPI was running near 3% while core measures stayed close to 2% and inflation excluding gasoline was 2.2% [1].
Two of the reasons given are the ones that matter for an energy portfolio. Energy prices remain high because of the continuing conflict in the Middle East, and, in the Bank's words, "new US tariffs and Canadian counter-measures have been announced"; financial conditions have tightened since July and the Canadian dollar has appreciated slightly on U.S.-dollar weakness [1]. The next decision is October 28 [1].
For a U.S. investor in Canadian producers and pipelines, the rate itself is secondary. The statement confirms three things that flow straight into the companies we cover: oil and gas prices high enough to lift Canadian inflation, a trade relationship with the United States that is being renegotiated with tariffs on both sides, and a Canadian dollar that has strengthened, which raises the U.S.-dollar value of Canadian-dollar dividends and lowers the Canadian-dollar value of U.S.-priced oil.
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1
Bank of Canada maintains the policy rate at 2¼%
Overnight rate target 2.25%, Bank Rate 2.5%, deposit rate 2.20%; Q2 2026 GDP growth 3.3%; CPI inflation about 3%; core close to 2%; inflation excluding gasoline 2.2% in July; unemployment 6.4% in July; 'new US tariffs and Canadian counter-measures have been announced'; energy prices elevated on the Middle East conflict; financial conditions tightened since July; Canadian dollar appreciated slightly on U.S.-dollar weakness; upside risks to inflation increased; next announcement October 28, 2026.
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2
Bank of Canada maintains the policy rate at 2¼% (July 15, 2026 decision)
Rate held at 2.25%; 2026 GDP growth projected at 0.7%; May CPI 3.2%; June unemployment 6.5%; 2027 and 2028 growth 1.8%, inflation around 2%; risks from the war in the Middle East and U.S. trade policy; next announcement September 2.
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