Industry News · Rates
Bank of Canada Holds at 2.25%, Next Decision October 28
The Bank left the overnight rate at 2.25% on September 2, unchanged since last October's cut, with no scheduled decision before October 28 and bank prime holding at 4.45%.
September 3, 2026 · 2 min read
The Bank of Canada held its target for the overnight rate at 2.25% on September 2, with the Bank Rate at 2.5% and the deposit rate at 2.20%. The rate has not moved since the October 29, 2025 cut, and the next scheduled decision is October 28. For business owners on prime-linked lines and term loans, or holding an application back until money gets cheaper, the number under floating-rate credit stays where it has sat since last fall, with no scheduled decision that could change it for eight weeks.
Unchanged Since the October 2025 Cut
The Bank's policy interest rate page shows the last change as the quarter-point cut to 2.25% on October 29, 2025. Each of the seven scheduled decisions since, on December 10, January 28, March 18, April 29, June 10, July 15 and now September 2, has left it there.
Chartered bank prime has held with it. The Bank's daily digest lists prime at 4.45% as of September 2, the same figure PFG reported after the July 15 decision.
Governing Council tied the hold to its own July Monetary Policy Report, writing that "with the economy and inflation evolving broadly as forecast in the July MPR, Governing Council agreed to leave the policy rate unchanged."
Growth Up, Inflation Split by Gasoline
The economy grew faster than it had been. GDP was up 3.3% in the second quarter, per the release, after very weak growth in the first, with consumption, housing, exports and business investment all contributing. Unemployment edged down to 6.4% in July, though the release adds that "demand for labour remains subdued and indicators point to continued excess supply."
Inflation is the harder half. CPI inflation has been hovering around 3% in recent months, and the release attributes that mainly to persistently higher gasoline prices. Take gasoline out and inflation was 2.2%, with core measures close to 2% in July.
What the Bank Said It Is Watching
The risks named on September 2 lean toward higher inflation. The release says that "with the Middle East conflict still ongoing and little progress reopening the Strait of Hormuz, upside risks to the Bank's inflation forecast have increased." It also notes that new US tariffs and Canadian counter-measures have been announced following the breakdown of trade talks between Canada and the United States.
The guidance stays conditional in both directions. "Governing Council will assess the sustainability of the economic rebound and the outlook for inflation, and is prepared to adjust monetary policy as needed," the release states. The next scheduled announcement is October 28, 2026.
PFG’s View
Waiting for a cut is now a plan with a date on it. There is no scheduled decision before October 28, and the Bank just said its inflation risks have moved higher. An owner who has held an application back since spring has been waiting on a number that has not changed in ten months.
The wait has a cost the rate table does not show. The lease clause, the equipment quote, the second location, whatever the money was for, has been aging while the rate sat still. That cost is real even when the rate never moves.
On a floating line, the carry today is the carry you had in April. A quarter-point cut, if one ever comes, is worth about $375 a year on a $150,000 drawn balance. That number is an illustration, and it is the size of the thing owners have been waiting for.
In a flat stretch, the rate is not the variable in a lender's decision; the file is. The lender is pricing the borrower: trailing twelve months of statements, whether cash flow covers the payment at today's prime with room left over, and whether the story in the application matches the bank statements. A file that carries at 4.45% prime plus its spread carries the same way in October. A file that does not will not be rescued by a quarter point.
Run the file at today's prime. If it carries, the calendar is yours. If it does not, the work is in the file.
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