In November, the C.D. Howe Institute’s Monetary Policy Council advised the Bank of Canada to maintain the overnight rate at 5.00% in December 2023 and January 2024, then reduce it to 4.75% by June 2024 and 4.00% by December 2024.
The prestigious Canadian nonprofit policy research organization’s recommendation reflects a mix of caution regarding persistent near-term inflation and optimism that current monetary policies and a slowing economy will align inflation with the 2% target by 2025. The Council’s decision considers global disinflation trends, wage pressures, and the impact of higher interest rates on the housing market, suggesting a less tight labour market and moderated inflation in the future.
Today, while announcing the decision to hold the interest rate at 5%, the Bank of Canada expressed ongoing concerns about inflation risks and said it is ready to increase rates if necessary, emphasizing the need for continued easing in core inflation and a balanced focus on economic demand-supply, inflation expectations, wage trends, and corporate pricing.
This year, the Bank of Canada increased interest rates three times, increasing the rate from 4.25 in December of 2022 to 5% in July.
| Date | Target (%) | Change (%) |
|---|---|---|
| December 6, 2023 | 5.00 | — |
| October 25, 2023 | 5.00 | — |
| September 6, 2023 | 5.00 | — |
| July 12, 2023 | 5.00 | +0.25 |
| June 7, 2023 | 4.75 | +0.25 |
| April 12, 2023 | 4.50 | — |
| March 8, 2023 | 4.50 | — |
| January 25, 2023 | 4.50 | +0.25 |
Inflation has reduced this year, from 5.9% in January 2023 to 3.9% in October 2023.
| CPI | CPI excluding gasoline | |
|---|---|---|
| January 2023 | 5.9 | 5.9 |
| February 2023 | 5.2 | 5.7 |
| March 2023 | 4.3 | 5.2 |
| April 2023 | 4.4 | 4.9 |
| May 2023 | 3.4 | 4.4 |
| June 2023 | 2.8 | 4.0 |
| July 2023 | 3.3 | 4.1 |
| August 2023 | 4.0 | 4.1 |
| September 2023 | 3.8 | 3.7 |
| October 2023 | 3.1 | 3.6 |
As the Bank of Canada is committed to achieving a 2% inflation target and restoring price stability, the central bank will be assessing how much tighter monetary policy will need to be and whether the policy interest rate needs to change further to bring supply and demand back into balance and return inflation to target. The scheduled dates for announcing the overnight rate changes are as follows:
- Wednesday, January 24, 2024
- Wednesday, March 6, 2024
- Wednesday, April 10, 2024
- Wednesday, June 5, 2024
- Wednesday, July 24, 2024
- Wednesday, September 4, 2024
- Wednesday, October 23, 2024
- Wednesday, December 11, 2024
On January 24th, April 10th and October 23rd, the Bank of Canada will also publish the quarterly Monetary Policy Report.







