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Canada's central bank just sent a message that every borrower, saver and budget-conscious household should hear: The economic calm you're hoping for may not arrive on schedule.
In a speech given to the Manitoba Chamber of Commerce at the end of March, Bank of Canada (BoC) Senior Deputy Governor, Carolyn Rogers, acknowledged that Canadians who had already lived through five years of economic upheaval may need to brace for the next half decade (1). Speaking in Brandon, MB, Rogers outlined a list of current structural forces reshaping how the central bank thinks about inflation, prices and economic growth. In particular she highlighted that the new oil price shock from the conflict in Iran, U.S. protectionist trade policy, Canada’s slowing population growth and the rise of artificial intelligence are all problematic themes that will continue to impact Canada’s economic health.
While the BoC held its benchmark interest rate steady at 2.25% for a third consecutive time in March 2026, Rogers made it clear: Stability today does not mean stability tomorrow.
For Canadians managing mortgages, variable-rate debt or inflation-sensitive budgets, this is not just central bank commentary. It has direct dollar implications.
Why the Bank of Canada is rethinking its inflation playbook
The BoC's inflation target of 2% remains in place, and Rogers reaffirmed the bank's confidence in this economic measure, but she acknowledged that the central bank underestimated how long inflation would stick after COVID-19 — and that its models failed to fully account for the scale of the supply shocks that drove prices higher.
As a result, the BoC has since widened the set of measures it uses to track underlying inflation. Rogers acknowledged that this new approach has, at times, created confusion — even signalling the appearance of moving the goalposts.
"So, we are reflecting on what we learned and on how we can improve our communications to guide expectations," she explained (2).
While the annual inflation rate cooled to 1.8% in February, Rogers and many other economists expect this rate to rise in the months ahead as higher gas prices persist and tariffs continue to hurt specific sectors of the economy.
For Canadians, this creates a difficult backdrop for households trying to plan: Inflation is low for now, but the factors that could push it higher are already in motion.
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