Bank of Canada maintains key interest rate of 2.25 percent

The Bank of Canada held its key lending rate at 2.25 percent on Wednesday, underscoring the economy’s resilience despite tariffs imposed by US President Donald Trump.

Canada’s economy bounced back in the third quarter with 2.6 percent growth, while employment increased in November for the third straight month. However, the central bank warned that GDP growth will be “weak” in the fourth quarter due to an expected drop in net exports.

“Growth is expected to strengthen in 2026, though uncertainty remains high and significant fluctuations in trade could continue to create quarterly volatility,” the bank said.

In recent months, Canada has been hit with US tariffs of 25 to 50 percent on a range of exports—including aluminum, steel, automobiles and lumber. Trump halted trade talks with Canada in late October, and discussions have not resumed.

Given the “elevated” uncertainty, the Bank of Canada said it remains “prepared to respond” if economic conditions shift.