Bank of Canada sees inflation at or above 3% through much of 2027

Higher oil prices could keep Canadian inflation at or above three per cent through much of 2027, Bank of Canada Governor Tiff Macklem told the House of Commons finance committee on November 3.

Macklem said the Bank raised its policy rate by 25 basis points to 2.5 per cent at its previous week’s decision—the first increase since July 2023—because the inflation outlook had deteriorated even as economic growth improved modestly.

The Bank’s forecast has gross domestic product growing about one per cent in 2026 and close to two per cent in both 2027 and 2028. It expects inflation to be about 3.5 per cent at the end of 2026, remain around or above three per cent for much of 2027, and return near the two per cent target around mid-2028.

Those numbers are forecasts, not guaranteed outcomes. Macklem said decisions will be made one meeting at a time and that another rate increase could be needed, while stressing that the Bank would proceed carefully.

Source: Bank of Canada, opening statement to the House of Commons Standing Committee on Finance (November 3, 2026).

Illustrative stock photo: ACatInABox / Unsplash (Unsplash Licence). The image is illustrative of Canadian fuel costs and does not depict a specific price change in the forecast. Cropped/resized by WordPress.