This week, all eyes are on the Bank of Canada (BoC) — but don’t place any bets. Speculation is divided on whether or not the central bank will lower its overnight rate on Wednesday. The threat of inflation is currently very real, but so is the yo-yo tariff war.

For homeowners, prospective buyers, and mortgage holders in Calgary and across Alberta, this pause may feel frustrating. But there’s reason to remain optimistic: rate relief is likely coming — either now or in the near future.

Why the BoC Might Be Holding Off

April’s inflation data may have looked encouraging at first glance — with headline CPI dropping from 2.3% to 1.7% — but that dip was largely due to the federal government’s removal of the consumer carbon tax, which sent energy prices down by 12.7%. Strip out energy, and inflation actually rose to 2.9%.

More concerning for the BoC are its core inflation measures:

• CPI-Trim increased from 2.9% to 3.1%

• CPI-Median rose from 2.8% to 3.2%

With both now above the Bank’s upper target range of 3%, the BoC’s hands are tied. It cannot justify a rate cut while inflation data, particularly core measures, suggest persistent pressure.

Alberta’s Economic Picture: Weakness Behind the Numbers

While inflation is keeping rates high, the broader economic picture tells a different story — especially in Alberta.

• Unemployment in Calgary and Alberta remains elevated, and wage growth is decelerating. Nationally, fewer than 60% of new labour market entrants are finding jobs — a sign of growing slack.

• Consumer spending and business investment have stalled, while first-quarter GDP was buoyed only by a one-time trade anomaly.

• Housing market activity in Calgary is subdued, with resale listings on the rise and buyer demand tapering off. This has cooled what had been a strong early spring market.

• Mortgage delinquencies are ticking upward, especially among stretched borrowers. Calgary’s real estate market, like the rest of Canada, is seeing an increase in missed payments on both mortgage and non-mortgage debt.

Banks are responding by increasing their loan-loss provisions — a clear sign of deteriorating credit quality.

What It Means for Calgary Mortgage Rates

For fixed-rate borrowers, some lenders have quietly raised rates in recent weeks, despite falling Government of Canada bond yields. This paradox may reflect lender caution as we head into the summer and close out the spring housing market.

But for variable-rate mortgage holders, the outlook is more hopeful.

While the BoC may stay on hold this week, most economists and mortgage experts believe the Bank will resume rate cuts later in 2025 as inflation pressures ease and economic softness becomes harder to ignore.

In the meantime, keep an eye on this Friday’s Canadian and U.S. employment reports — they may set the tone for bond yields and mortgage rate trends through summer.

Bottom Line for Albertans

Although a rate cut might not come this week, there’s light at the end of the tunnel. If you’re in Calgary or anywhere in Alberta, here’s what to consider:

• Variable-rate mortgage holders: Stay patient. More rate relief is likely before year’s end.

• Fixed-rate shoppers: Lock in soon if you find a good deal, as some lenders are already moving rates higher despite broader market signals.

• Renewing or refinancing? Now’s a good time to speak with a mortgage advisor. Market volatility means opportunities — and risks — for borrowers who stay informed.

In this environment, it pays to work with professionals who understand both national policy and local realities. Reach out to me for a no-obligation consultation on your mortgage opportunities.