If you’re thinking about buying a home, refinancing, or just keeping an eye on your mortgage, the latest news on the Bank of Canada matters. Here’s an update on what’s happening with interest rates, the economy, and what it could mean for you in Alberta.

Bank of Canada Holds Rates for Now

The Bank of Canada is expected to keep its policy rate at 2.25% at its next meeting on December 10. While the easing cycle—when rates are cut—is technically “paused,” economists are split on what comes next. Some see further cuts in 2026, while others forecast hikes.

Why the Bank Cut Rates in October

In late October, the Bank cut the policy rate to 2.25%, citing weak domestic demand, labour market softness, and tepid growth expected in the second half of 2025. Officials had considered delaying the cut until after the federal budget and more clarity on U.S. trade policy, but ultimately decided that a small cut was warranted. The rate is now considered “on the stimulative side” of neutral, meaning it encourages borrowing without overheating the economy.

The central bank also noted that monetary policy was “likely close to the limits of what it could do” to support growth under current circumstances. Trade-affected sectors like auto, steel, aluminum, and lumber have been hit hard, and the spillover to the broader economy reinforced the case for the cut.

Mixed Views on the Next Move

Most banks—including TD, RBC, and CIBC—expect the Bank of Canada to hold rates steady at 2.25% through 2026. BMO and National Bank leave the door open for one more small cut if growth and inflation weaken early next year.

Scotiabank takes a different view. Their economists believe the rate-cut cycle is over and that Governor Tiff Macklem could raise rates by two quarter-point moves in the second half of 2026. Scotiabank argues that the recent cuts were more about “insurance” than stimulus, and ongoing inflation pressures are strong enough to justify future hikes once the economy stabilizes.

Economic Trends Shaping Bank of Canada Decisions

Canada’s economy grew more than expected in the third part of 2025, mostly because we sold more to other countries, not because people were buying more at home. In October, the economy actually got a little smaller, and in Alberta things like the teachers’ strike made it harder for businesses. Prices aren’t rising as fast as before, but some costs have stuck around because people are still spending money and many families have savings. Jobs are a mixed picture too: Canada had 66,600 more jobs in October, but there are fewer full-time jobs and more part-time ones. Because of all this, the Bank of Canada is being careful about changing interest rates.

New Immigration Targets Could Affect the Bank’s Plans

The federal government’s new immigration targets could significantly impact the Bank’s outlook. By reducing temporary residents to under 5% of the population by 2027, population growth could slow sharply, possibly reaching near-zero in 2026 and 2027.

This slower population growth changes the mechanics of the labour market. The unemployment rate could fall even without net job creation, tightening the labour market faster than expected. For the Bank of Canada, this is a risk: lower interest rates in such a scenario could re-ignite inflation pressures.

Lower immigration could also dampen housing demand, particularly in the purpose-built rental sector, since fewer newcomers reduce the need for new housing supply. That said, continued government support for home building may offset some of this downside risk.

What This Means for Alberta Homebuyers

For Alberta homebuyers, the takeaway is:

• Rates are likely to stay stable in the short term. If you’re locking in a mortgage, your rate shouldn’t change much immediately.

• Future moves are uncertain. Some economists expect cuts in 2026, while others, like Scotiabank, anticipate hikes. Keeping an eye on inflation, employment, population growth, and domestic spending will help you time purchases or refinancing.

• Immigration and housing demand matter. Slower population growth could moderate demand for new homes and rental properties, which may influence construction activity and housing prices in Alberta.

Keep an Eye on Key Updates

The Bank of Canada releases minutes from each policy meeting two weeks afterward, offering insight into the next moves. Economic indicators like GDP, employment numbers, inflation reports, and population growth will continue to shape monetary policy throughout 2026. Contact me to discuss how these change impact your personal journey to homeownerhsip.