Macklem Sees Gov’t Diversification, Holds BoC Rate at 2.25%

After the BoC’s April policy meeting, Macklem highlighted government actions aimed at reducing reliance on U.S. trade and smoothing interprovincial barriers as a positive sign for long‑term stability. He noted that Ottawa’s recent fiscal update is unlikely to shift the central bank’s inflation forecasts.

He said inflation was 2.4% in March, slightly above the 2% target, and confirmed the policy rate remains at 2.25% for the fourth consecutive decision. The central bank’s updated outlook flagged two risks: a possible oil price spike from the Iran conflict and the upcoming review of the Canada‑U.S.‑Mexico trade agreement.

Holding rates steady leaves borrowing costs unchanged for households and businesses, while Macklem stressed that monetary policy alone cannot offset structural shifts such as protectionist U.S. measures or AI‑driven disruption; fiscal and regulatory reforms are needed to lift investment and productivity.

On the same day, the S&P/TSX Composite rose 0.3% to 22,450 points, the Canadian dollar traded at 1.36 per US dollar, Royal Bank of Canada (RY.TO) held a market cap of roughly CAD 150 billion and gained 0.5%, and Shopify Inc. (SHOP.TO) slipped 1.2% to a CAD 70 billion valuation. BCE Inc. (BCE.TO) edged up 0.1% to a CAD 55 billion cap, while Enbridge (ENB.TO) fell 0.4% to CAD 80 billion.

Investors will watch for any shift in the BoC’s stance if inflation persists above target or if the government’s diversification measures translate into measurable gains in non‑U.S. exports and interprovincial trade.