The Bank of Canada is ‘cautious’ heading into 2026, with all eyes on CUSMA
Global News
The Bank of Canada says it's staying 'cautious' heading into 2026 as uncertainty remains high with the global trade war, tariffs and a trade deal with the U.S. set for review.
The Bank of Canada says it’s staying “cautious” heading into 2026 as uncertainty remains high with the global trade war, tariffs and a trade deal with the U.S. set for review next month.
On Tuesday, the Bank of Canada released its written summary of deliberations from the last rate announcement.
This comes after the Bank opted to leave borrowing rates alone earlier in December, and after cutting its benchmark rate by a total of one per cent over the course of four meetings in 2025.
Although there were several areas of caution, the Bank said Canada’s economy was doing somewhat better than expected overall.
“Members agreed the Canadian economy was showing signs of resilience after a year of trade upheaval, but uncertainty remained high,” said the Bank of Canada.
“They would remain cautious in interpreting incoming data given recent volatility and would be prepared to react if their outlook changed materially.”
The trade war began in March, when U.S. President Donald Trump imposed tariffs on goods and services from virtually all countries, including Canada.
Although the terms outlined in the Canada United-States Mexico Agreement, or CUSMA, meant the majority of Canada’s exports would be free of tariffs, the duties imposed on critical sectors like steel, aluminum, lumber, automotive and others meant GDP was being impacted.
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