RECAP | Bank of Canada holds interest rate at 2.75% amid 'unusual uncertainty'

That’s all for this live page. If you missed the proceedings, we’ll have more news and analysis about the Bank of Canada’s decision later today on CBC.ca.

The central bank will make its next interest rate announcement on July 30.

It will also release its quarterly monetary policy report that day, giving an overview of where the Canadian economy stands and the bank’s outlook going forward.

We’ll see you then.

Rate cuts can always help small businesses, according to one of their biggest lobby groups.

However, zooming out shows that interest rates are much lower than they were two years ago,​ says the Canadian Federation of Independent Business.

I spoke with Andreea Bourgeois, the CFIB's director of economics.

Bourgeois, who is based in Moncton, N.B., said that an interest rate cut would have helped encourage businesses to invest and spend money — but the Bank of Canada is also watching to make sure inflation doesn't keep lingering.

"There's a little bit of stubborn inflation still persisting in the economy and that is not good.”

Bourgeois told me that inflation is still a big worry for small businesses, especially ones that import.

So she thinks, for now, the businesses she looks out for are OK with the announcement made this morning, even though a rate cut might have helped trigger some extra spending as the summer gets underway.

I just got off the phone with Charles Bernard, the lead economist with the Canadian Automobile Dealers Association.

Bernard said he understands and agrees with the rationale for the Bank of Canada holding steady on its interest rate.

However, he also said a rate cut would have been helpful for auto dealers in managing their costs.

While sales were better in May than they were in the same month last year, dealers are also holding more inventory this year than they were in 2024.

“Once dealers get those cars, as soon as they hit the lot, they're paying for it,” Bernard said.

“If there's excess supply, which is the case right now in the market, and there's high interest rates, it has a major impact on their businesses.”

Consumers who are financing a car and anxious to pull the trigger on a purchase could also be influenced by a rate cut, he said.

“Consumers are a bit more worried about the pricing because of the tariffs So it's a tougher kind of ecosystem to go through and a reduction in rates would have helped that side of the dynamic.”

Canadian manufacturers say the question marks around things like tariffs, iffy trade relationships with the United States and possible inflation from counter tariffs mean no interest rate cut is no surprise to them.

"We understand why, and there's no bad reaction from the sector," said Dennis Darby, chief executive officer of Canadian Manufacturers & Exporters.

Lower interest rates would help their members because cheaper borrowing costs can stimulate consumers and other businesses to spend money on getting stuff built.

But it's not the most important piece of the puzzle right now. Instead, that's getting "certainty in [Canada's] relationship with the U.S.," said Darby.

And, he said, that's on the government, not the Bank of Canada.

So what the manufacturers of Canada say they need most is not something Tiff Macklem can provide.

According to Penelope Graham, a mortgage expert at Ratehub.ca, the lowest five-year variable mortgage rate in Canada is 3.95 percent.

“However, today’s mortgage rates are still low compared to previous months, and with an influx of mortgage renewals hitting the market, Canadian lenders are competing for new business,” she said.

“It's more important than ever to shop around in today’s rate environment, especially as many coming up for renewal will face higher payments.”

The Bank of Canada’s lending rate is used as a benchmark by financial institutions, such as banks, to set interest rates on financial products like mortgages.

So when the bank cuts its rate, it can become cheaper to borrow money.

Today, the bank kept its key rate steady, so not much changes for variable rate mortgage holders.

Toronto mortgage broker Marcus Tzaferis says he is seeing more Canadians choose variable rate mortgages with the expectation that interest rates will be lower before the end of the year.

Still, he says the decision to go for a variable versus fixed rate mortgage depends on the homebuyer and their appetite for risk.

I'm Laura MacNaughton, a business producer with CBC National News in Toronto.

Toronto real estate broker John Pasalis suggests homebuyers could jump back into the market in the fall if the Bank of Canada cuts rates down to two per cent.

"We would need to see several Bank of Canada cuts to potentially stimulate a little bit more demand coupled with a little bit more clarity on the economic front. People need to feel a little bit more confident about the road ahead," said Pasalis.

New numbers out this morning from the Toronto Regional Real Estate Board show a 13 per cent sales drop in the Greater Toronto Area in May compared to May 2024.

Nationally, home sales in Canada were down 10 per cent in April compared to a year ago, according to the most recent Canadian Real Estate Association data.

Pasalis says if interest rate cuts are "matched with a little bit more clarity on the economy, on the trade wars," that could see potential buyers move off the sidelines and bring back some confidence in the housing market.

I’m James Dunne, a CBC business unit producer in Toronto.

Sure, the Bank of Canada’s interest rate decision is news today, but so is Game 1 of the Stanley Cup final, so I asked Andrew DiCapua, principal economist with the Canadian Chamber of Commerce, about both.

First of all, he’s rooting for the Oilers.

“I think Edmonton is going to come out on top,” he said.

He’s not as optimistic about the direction of the Canadian economy in the months ahead.

“What's not clear is how large that slowdown is going to be and if that's going to be a contraction at some point,” said DiCapua, adding that “we could see profitability concerns, layoffs” because of the impact of Trump’s trade war.

As the data comes in before the bank’s July meeting, DiCapua believes the numbers will likely compel it to cut interest rates to help stimulate and protect business.

Back to the hockey game, he says there might be some inspiration for business leaders in a big win for the country.

“We could use a little bit of a boost in confidence and hopefully hockey brings us that.”

Macklem ends the news conference on a lighter note, with a nod to the NHL Stanley Cup Finals.

“Go Oilers! Let’s bring home the Stanley Cup,” said Macklem, who was wearing an Oilers pin on his lapel.

“There’s a couple things that you didn’t ask us about that I wanted to comment on,” said Macklem.

He notes that the bank will be weighing the economic impact of the forest fires spreading in Western Canada.

“For now, the priority is clearly getting fires under control and keeping everybody safe,” said Macklem.