TOP STORY
The BoC’s Fifth Hold Meets a Construction Slowdown
A day after the Bank of Canada held its policy rate at 2.25% for a fifth straight time, fresh data underlined exactly the soft backdrop keeping the Bank cautious: the total value of building permits fell 7.6% in April to $12.5 billion, with British Columbia driving much of the decline (Statistics Canada). Economists read Wednesday’s hold as a central bank in wait-and-see mode — Scotiabank’s Derek Holt said the Bank “offered nothing new” and is arguably overplaying trade-policy risks, while TD pointed to GDP running well below the Bank’s own projections, leaving real slack in the economy (economist roundup). For BC and Alberta builders, the message is consistent: borrowing costs are frozen, the next move could go either way, and weak construction intentions are now a flashing signal rather than background noise. With RBC expecting no rate relief before a possible 2027 hike, the financing math on stalled projects isn’t getting easier this year.
THE NUMBERS — STATISTICS CANADA
Building Permits, April 2026 — Across Canada, down 7.6% to $12.5B, with both non-residential (-10.5%) and residential (-5.5%) falling. BC led the non-residential drop — including a $607M plunge in institutional intentions — and BC alone more than accounted for the entire national multi-family decline, its permits falling $432.7M against a $429.7M national drop. (Alberta bucked the trend, with permits up 3.3% to $1.6 billion.) Nationally, 24,000 units new homes were authorized, down 8% from March. Statistics Canada
International Investment Position, Q1 2026 — Canada’s net foreign asset position fell $310.8B to $1,360.5B as global market swings reshaped the balance sheet — a reminder of how exposed Canada is to the same volatility unsettling the BoC. Statistics Canada
FROM THE ECONOMISTS
Scotiabank — Derek Holt — reaction to the BoC hold — The Bank “offered nothing new” and is in pure monitoring mode, waiting for clarity on the risks — and, in Holt’s view, overplaying the threat from U.S. trade policy.
TD — Andrew Hencic — reaction to the BoC hold — Calls the growth backdrop the real story: GDP came in well below the Bank’s last projections, leaving significant slack. TD sees the Bank on hold through the balance of 2026.
RBC Economics — BoC on Hold While the Fed Moves Toward the Sidelines — Expects the Bank to stay parked at 2.25% for the rest of the year, with the next move a moderate hike in 2027 rather than a cut.
IN BRIEF
Auto Sales Cool — Canadians registered 397,601 new motor vehicles in Q1, down 6.9% from a year earlier — another sign of cautious consumers. Statistics Canada
Travel Rebounds — International arrivals to Canada hit 5.2 million in May, up 7.6% year-over-year — the second straight annual gain since the cross-border slump began in early 2025. Statistics Canada