Question Period Note: Bank of Canada Deliberations

• It is normal for the Bank of Canada to debate the pros and cons of policy rate options in its deliberations.
• The Bank of Canada’s statement was clear that Governing Council members expect the economy to grow and inflation to remain close to target.
• Rates prior to the Bank’s decision were still elevated –well above pre-pandemic levels – and the Bank’s decision reflects a return to normalcy to ensure inflation remains at target.
• The economy is on solid footing:
- The Canadian economy grew at around 2 per cent in the first half of the year and the Bank of Canada expects growth of 1.75 per cent in the second half.
- The IMF expects Canada to have the second strongest growth in the G7 this year, and the strongest in 2025.
- Inflation is now below 2 per cent, and has been in the Bank’s control range for all of 2024, and is expected to remain at 2 per cent in years to come.
- This solid economic performance has allowed the Bank to lead the G7 in reducing interest rates. This is welcome news for Canadians.

• Deliberations by the Bank of Canada indicated that some members expressed concerns that a 50 basis-point cut at its October 23 policy rate decision meeting could be interpreted as a sign of economic trouble.

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