ICBA EconoBot | Bank of Canada Expected to Hold at 2.25%

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No Relief From Macklem: Bank of Canada Expected to Hold at 2.25% Wednesday

The Bank of Canada delivers its rate decision Wednesday morning alongside a full Monetary Policy Report and a Macklem press conference — and markets have all but ruled out a move, pricing roughly a 1% chance of anything other than a sixth consecutive hold at 2.25%. The Bank is boxed in: headline inflation hit 3.2% in May, its highest reading since December 2023, though the jump was driven largely by gasoline rather than broad domestic pressures. Meanwhile, RBC Economics has bumped its Q2 GDP tracking up to 2.2% annualized from 1.7%, citing resilient household spending and a pickup in business investment — hardly the backdrop for a rate cut. For contractors, that means borrowing costs stay stuck where they are: no financing relief for a residential sector that badly needs it, and project pro formas that have to keep working at today’s rates. The real news will be in the MPR itself — watch the Bank’s updated growth forecasts and its read on how 50% U.S. steel and aluminum tariffs are still feeding through to construction input costs. The Bank held in June citing exactly that tension between tariff-driven costs and soft growth.

THE NUMBERS — STATISTICS CANADA

Leading Indicator of International Arrivals, June 2026 — Released Monday. International arrivals totalled 5.5 million in June, up 3.6% year-over-year, with a clear FIFA World Cup bump: air arrivals from the 15 overseas countries playing matches in Vancouver and Toronto jumped 32.5%. Good news for B.C. hospitality and the businesses built around it. The sobering flip side: Canadian trips to the U.S. remain down 28.7% from June 2024 levels. Statistics Canada

Lending Services Price Index, Q1 2026 — Released Monday. StatCan’s measure of what lenders charge for personal, mortgage and business loan services is now out for the first quarter — a niche series, but one that feeds into how the real cost of credit for businesses gets measured. Statistics Canada

Electric Power Selling Price Index, May 2026 — Released today. The monthly index of what distributors charge commercial and industrial power users is updated through May. Worth tracking closely in Alberta, where a wave of data-centre projects is about to test the grid — and where industrial power pricing will shape which projects pencil out. Statistics Canada

WORTH WATCHING

CMHC Housing Starts, June — Thursday, 8:15 a.m. ET. May starts were essentially flat nationally, and B.C. remains the weak spot. With the BoC on hold and no rate relief coming, don’t expect a construction rebound in this print — the housing-start math is a policy problem, not a rate-timing problem. CMHC

June CPI, Monday July 20 — The single biggest data point between now and the BoC’s September decision. If May’s 3.2% proves to be more than a gasoline story and price pressures broaden, rate cuts stay off the table into 2027 — and construction financing costs stay exactly where they are. Statistics Canada release schedule

The MPR’s Tariff Math — Wednesday’s Monetary Policy Report will update the Bank’s assessment of U.S. trade restrictions, which have already cut Canadian steel exports roughly in half under 50% tariffs. Every point of tariff pass-through lands on rebar, structural steel and cladding budgets on job sites across B.C. and Alberta. Bank of Canada