Industry News · Rates
Bank of Canada Holds at 2.25% for a Fourth Straight Decision
The overnight rate stays at 2.25% for a fourth consecutive decision, leaving bank prime at 4.45% and the cost side of floating-rate business borrowing where it sat in the spring.
July 15, 2026 · 2 min read
The Bank of Canada held its target for the overnight rate at 2.25% on July 15, with the Bank Rate at 2.50% and the deposit rate at 2.20%. It is the fourth consecutive decision to leave the rate untouched, and for Canadian business owners carrying floating-rate debt it means the number underneath their borrowing costs has now sat still through four straight announcements.
Four Decisions, One Number
The overnight rate has held at 2.25% through the March 18, April 29, and June 10 announcements, per the Bank's releases for those dates. Today's decision extends that run past the four-month mark.
Chartered bank prime has held alongside it. The Bank's daily digest shows the prime rate at 4.45% as of July 8, unchanged from the week before.
What the Bank Is Watching
CPI inflation came in at 3.2% in May, but gasoline accounts for most of the gap. Excluding it, inflation was 2.2%, core measures stayed close to 2%, and the Bank projects inflation returning to around 2% in early 2027.
The rest of the picture is steady rather than strong. Second-quarter growth is estimated at about 2.5%, and unemployment was 6.5% in June, inside the 6.5% to 7% band it has occupied since the end of 2024.
Governing Council kept its guidance conditional, writing in the July 15 release that it is "prepared to adjust monetary policy as needed." The release names the war in the Middle East, oil price volatility, and US trade policy as the live risks.
What Stays in Place for Borrowers
A held policy rate keeps the reference rates on business credit where they were. Operating lines and term loans priced off prime are priced off the same 4.45% they were in the spring.
The ceiling on Canada Small Business Financing Program loans holds too. The program's regulated maximum floating rate is the lender's prime lending rate plus 3%, per the ISED program page, which works out to 7.45% today; program lines of credit are capped at prime plus 5%.
PFG’s View
A hold reads like a non-event. For an owner pricing a renewal or penciling a new file, it is the useful kind of quiet. The planning math holds still, and the numbers you ran in the spring are still the numbers.
Take a floating operating line at prime plus 1.5%, a common shape for an established file. At today's prime that is 5.95%, so a $200,000 drawn balance carries about $11,900 a year in interest, a little under $1,000 a month, the same carry it had at renewal season in April. That is an illustration, not a quote. Spreads are set file by file.
On a CSBFL file, the regulated program maximum floating rate is prime plus 3%, so the worst case you can pencil in today is 7.45%. That ceiling is a program fact, not a rate anyone is promising you, and it has not moved in four decisions either.
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