With weaker job prospects in Canada, and businesses facing more fallout from tariffs, signs abound the Bank of Canada may cut interest rates.

When is the Bank of Canada interest rate announcement?

The bank’s next announcement is coming Wednesday, Sept. 17, and experts predict the time may be right for a rate drop.

“A combination of weaker jobs data both north and south of the border has provided the bank a compelling reason to deliver a 25-point cut next week,” Ratehub.ca mortgage expert Penelope Graham said in a press release.

“Evidence is mounting that tariffs are whittling economic strength, and that some stimulus will be needed in the short term.”

In the springtime, many financial experts noted further rate drops would be likely, but so far, the bank has held firm since March, with the interest rate sitting at 2.75 per cent.

The interest rate is used by mortgage companies and money lenders to create their loan repayment fees.

“The door is certainly open to at least one more cut in 2025, should the economic data show further signs of weakness,” Graham said. “However, given core inflation metrics remain elevated, the bank won’t be keen to pass along too much stimulus too soon.”

Why Premier Doug Ford believes a rate cut is needed

Premier Doug Ford was shocked with the bank holding firm during its July 30 announcement, noting the economic uncertainty should have been enough to spur a rate drop.

“As we stare down economic uncertainty that’s putting hundreds of thousands of jobs at risk, it’s never been more important to stimulate economic growth and keep Canadians working,” Ford said in July.

Tariff impact on interest rates

According to RBC.com, Canadians are seeing the cost of tariffs start to impact our overall spending.

“The effects of tariffs increasingly reflected in producer prices with the potential to spill over into broader inflation metrics in the months ahead,” economists Nathan Janzen and Abbey Xu wrote in a press release.

They anticipate August inflation numbers to rise to 3 per cent year-over-year, up from 2.7 per cent in July, with higher gasoline prices and food prices.

Statistics Canada is expected to release its August inflation data on Sept. 16, a day before the bank’s announcement. Bank of Canada Governor Tiff Macklem takes inflation results into account prior to making any interest rate announcement.

Aggressive cuts coming, experts predict

According to a recent Reuters.com poll, held Aug. 29 to Sept. 3, two-thirds of economists who responded anticipate the bank will begin cutting rates in September before dropping the overnight rates only slightly in 2026.

And Scotiabank and CIBC economists agree.

“Economists at Scotiabank are revising their rate forecast in the wake of weak jobs numbers — and are now calling for a pair of rate cuts before the end of the year,” a story in investmentexecutive.com said.

And CIBC experts feel the Bank of Canada will resume interest rate cuts at the September meeting.

“Although tariffs have caused damage, the bank considers that stresses are also evident in other sectors of the economy and expects a further rate cut in the fourth quarter, which would take the benchmark interest rate down to 2.25 per cent,” a release in exchangerates.org.uk said.

Source: Inside Halton