An optimistic outlook on the country's economy saw the Bank of Canada (BoC) hold the interest rate at 2.25 per cent.
The rate hasn't changed since October 2025, when it dropped from 2.5 per cent.
According to the institution, Canada's economy is showing signs of improvement and inflation is expected to slowly ease from its recent spike.
Despite tariff uncertainty, slower population growth, and affordability challenges slowing down housing activity, the BoC projects that the economy will stabilize and grow, calling the difficulties "temporary factors." Canada's export growth is also expected to get stronger as different levels of government work to diversify trade partners.
Inflation rose to 3.2 per cent in May, mostly because of gasoline prices. Without gas, inflation was 2.2 per cent. The rate is expected to return to the 2 per cent mark in early 2027.
The war in the Middle East and the status of Canada's trade relationship with the United States remain the top risks to both the interest rate and the inflation rate.
The next interest rate announcement is scheduled for September 2, 2026.
