Bank of Canada Holds Rates Amidst Economic Resilience, Calgary Navigates Growth and Cost Concerns
The Bank of Canada's decision to hold rates at 2.25% signals economic resilience, but Calgary faces elevated unemployment and rising costs despite strong growth projections and a rebalancing housing market.
Calgary’s economic observers, including ATB Economics economist Mark Parsons, widely anticipated the Bank of Canada’s decision to maintain its policy rate at 2.25%. This "wait and see" approach follows an October rate cut and comes amidst persistent public concerns about the cost of living, which polls by Angus Reid Institute and Abacus Data indicate remains a top issue for a majority of Canadians.
Economic Outlook and Local Impact
The Bank of Canada’s decision stems from national economic data showing unexpected resilience. Canada's real GDP grew an annualized 2.6% in the third quarter, significantly exceeding the Bank of Canada’s previous 0.5% forecast. While underlying inflation remains around 2.5%—within the central bank’s target but above its midpoint—Bank of Canada Governor Tiff Macklem has indicated that monetary policy alone has limits in addressing structural economic shifts.
For Calgary, this steady interest rate environment translates into a mix of challenges and opportunities. The City of Calgary’s Fall 2025 Economic Outlook projects local economic growth at 2.9% for this year, driven by robust net migration and infrastructure spending, though unemployment is expected to remain elevated. The Calgary housing market shows signs of rebalancing, with WOWA data indicating moderating price growth and RBC Economics observing a significant increase in home resales. Royal LePage forecasts a modest aggregate home price increase for 2026, suggesting the current key rate may prompt increased buying activity. On the municipal front, Calgary City Council recently approved its 2026 Budget with a reduced property tax increase of 1.64%, though utility rates for water, wastewater, and stormwater are set to climb by 3.8%.
