Bank of Canada Announces No Rate Changes as of Sept. 2, 2026

Latest News 2 Sep

Bank of Canada Holds Policy Rate Steady Again, As Expected ~ Dr. Sherry Cooper
Here is the article written by DLC Economist Dr. Sherry Cooper about this mornings announcement.

Today, the Bank of Canada once again held the policy rate at 2.25%, the level it has held since October 2025. This is the bottom of the Bank’s estimate of the neutral overnight rate, where monetary policy is neither expansionary nor contractionary.

According to the Bank’s policy statement, “The continuing conflict in the Middle East is keeping energy prices high. New US tariffs and Canadian countermeasures have also been announced following the breakdown of trade talks between Canada and the United States. Both situations remain fluid.”

Overall, the global economy has shown resilience in the face of geopolitical headwinds. With still-high oil prices and elevated margins for refined energy products, inflation remains high in most countries.

Financial conditions have tightened since July. Long-term bond yields have moved up globally, including in Canada. The Canadian dollar has appreciated slightly on US-dollar weakness.

The Canadian economy strengthened considerably in Q2, with growth of 3.3%, while the Q1 figure was revised up to 0.3% from an initial reading of -0.1%. While some of the recent strength reflected temporary factors, the pick-up in activity was broad-based. Consumption showed solid gains. After several weak quarters, housing activity rebounded. Exports and business investment were up sharply. Labour market conditions have improved in recent months, with the unemployment rate edging down to 6.4% in July. Still, demand for labour remains subdued, and indicators point to continued excess supply in the economy.

Overall, recent data reaffirm the Governing Council’s view of a broadening recovery in Canada’s economy. However, uncertainty is high and new US tariffs and threats of further action pose risks to the sustainability of the recovery.

CPI inflation has been hovering around 3% in recent months, mainly because of persistently higher gasoline prices. So far, there has been little evidence of higher energy prices spreading to other components of inflation: excluding gasoline, inflation was 2.2%, and core inflation measures remained close to 2% in July. However, with the Middle East conflict still ongoing and little progress in reopening the Strait of Hormuz, upside risks to the Bank’s inflation forecast have increased. The longer that high oil prices and elevated refinery margins persist, the greater the risk of spillover to the prices of other goods and services. New US tariffs and Canadian counter-tariffs will also raise costs for some businesses and could feed into consumer prices over time.

“Economic growth in Canada has picked up after stalling over the past year. That puts us on a stronger footing as we face new challenges,” Macklem said in the prepared text of opening remarks for his press conference. “But uncertainty about the sustainability of the rebound has increased with new US trade actions.”

With the economy and inflation evolving broadly as forecast in the July MPR, Governing Council agreed to leave the policy rate unchanged. However, the upside risks to inflation have increased, while new tariffs make growth prospects more uncertain. Governing Council will assess the sustainability of the economic rebound and the outlook for inflation, and is prepared to adjust monetary policy as needed. The Bank remains committed to maintaining Canadians’ confidence in price stability through this period of global upheaval.
Bottom Line

The Bank of Canada has shown its willingness to bolster the Canadian economy amid unprecedented trade uncertainty and a record oil price shock. PM Carney is also working to diversify Canada’s trade away from the US, a strategy that has been remarkably successful so far. Canadian export diversification is gaining momentum. In addition, goods imports are also shifting away from the US to the rest of the world.

We maintain our view that the Bank of Canada will keep rates steady this year. If inflation broadens and accelerates, rate hikes are possible, but that is not our baseline forecast. The Bank of Canada will be reluctant to tighten into housing market weakness. While housing activity strengthened since May, momentum is muted, and affordability improvements are likely to taper off in the coming months.

The Federal Open Market Committee meeting is scheduled for September 15-16. Based on comments from Fed Chair Kevin Wash at the annual Jackson Hole Fed confab, a rate hike by the Fed is likely. Traders now predict a 68% chance of a fed funds rate hike of 25 bps.

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If this is hard to digest or understand, sometimes it’s easier to chat quickly on the phone and I can explain it in an easy to understand way.  Here is a link to my calendar to book a call;  CLICK HERE

Trish

Buying a Vacation Home with Family?

General 1 Sep

Buying a Vacation Home With Family in BC

Key things to discuss before you buy

  1. Decide exactly who is buying the property
  • Who will be registered on title?
  • Who will be borrowers on the mortgage?
  • How much is each person contributing to the down payment?
  • Will everyone own an equal percentage?
  • If one person contributes more, does that mean they own more?
  • Is anyone contributing money but not going on title?
  • Remember that mortgage liability and ownership percentages are separate issues. A lender may require borrowers to be jointly responsible for the entire mortgage even if their ownership shares differ.

2. Decide how title should be registered

In BC, two common forms of co-ownership are:

Joint Tenancy

  • Each owner has an undivided interest in the property.
  • Includes a right of survivorship.
  • If one owner dies, their interest generally passes to the surviving joint owner(s), rather than through their estate.
  • Often used between spouses.
  • It can become complicated when siblings, parents, adult children or multiple family units are purchasing together.

Tenancy in Common

  • Each owner has a defined ownership interest.
  • Ownership does not have to be equal.
  • For example:
    • Parents – 50%
    • Adult Child #1 – 25%
    • Adult Child #2 – 25%
  • An owner’s share generally becomes part of their estate when they die rather than automatically passing to the other owners.
  • This structure can provide greater clarity for unrelated owners or extended-family purchases.

For many multi-family vacation-home purchases, tenancy in common is worth discussing with the buyers’ lawyer, particularly where contributions or intended ownership percentages differ.

3. Have a written Co-Ownership Agreement

This is probably the most important recommendation.

Family members may get along extremely well today, but circumstances change. A lawyer-drafted Co-Ownership Agreement can establish the rules while everyone is still on good terms.

The agreement should address:

  • Percentage owned by each person
  • Initial down-payment contributions
  • Responsibility for the mortgage
  • Property taxes
  • Insurance
  • Utilities
  • Strata fees, if applicable
  • Repairs and maintenance
  • Major renovations
  • Furniture and improvements
  • How annual expenses are divided
  • Whether a reserve/emergency fund will be maintained
  • Who manages the bank account and pays bills
  • How decisions are made
  • What requires unanimous approval versus majority approval

It should also address how the family actually gets to use the vacation home:

  • How weeks/weekends are allocated
  • Holidays and long weekends
  • Whether owners can bring guests
  • Whether friends can use it without an owner present
  • Pets
  • Cleaning responsibilities
  • Damage caused by guests
  • Whether the property can be rented
  • Who receives rental income
  • Who manages rentals and related expenses

4. Have an exit strategy before purchasing

This is the area families often overlook.

Agree in advance on what happens if someone:

  • Wants to sell their share
  • Can no longer afford their share
  • Gets divorced or separates
  • Dies
  • Becomes incapacitated
  • Moves away
  • Has financial difficulties
  • Stops contributing to expenses

The agreement should establish a buyout process, including:

  • Does the family get the first opportunity to purchase the departing owner’s share?
  • How will the property be valued?
  • Will you use one appraisal or multiple appraisals?
  • How long does everyone have to complete a buyout?
  • Can an owner sell their interest to an outsider?
  • What happens if nobody can afford to buy them out?
  • At what point must the entire property be sold?

This is particularly important because BC’s Partition of Property Act provides mechanisms through which parties with interests in land can seek partition or sale of jointly owned property. (BC Laws)

In other words, “we’ll just figure it out if someone wants out” isn’t a great exit plan.

5. Consider death and estate planning

Every owner should review their Will and estate plan at the time of purchase.

This becomes particularly important with tenancy in common.

For example, imagine two sisters buy a cabin 50/50. One sister dies and leaves her estate to her children. The surviving sister could suddenly find herself owning the vacation home with her nieces and nephews.

The co-ownership agreement and each owner’s estate plan should therefore work together.

Ask the lawyer about:

  • Right of first refusal
  • Buyout rights upon death
  • Life insurance to fund a buyout
  • Whether ownership should pass to heirs
  • Whether spouses can inherit an interest
  • How joint tenancy versus tenancy in common affects the intended estate plan

6. Understand the tax implications

Don’t assume a vacation property will automatically be tax-free when it is eventually sold.

A cottage or vacation home can potentially qualify as a principal residence, provided CRA’s requirements are met, but generally only one property per family unit can be designated as a principal residence for a particular year. (Canada)

That means owners who already own their primary homes should obtain tax advice about:

  • Future capital gains
  • Adjusted cost base
  • Tracking renovation and improvement costs
  • Rental income, if applicable
  • Principal residence designation
  • Changes in use
  • What happens tax-wise when an owner dies or transfers their interest

Keep records and receipts for major capital improvements from day one.

7. Understand the mortgage implications

This is another important conversation before writing an offer.

Depending on the lender and structure:

  • All owners may need to be included in the mortgage application.
  • All borrowers may be jointly responsible for the mortgage.
  • One person’s debts or credit situation can affect qualification.
  • Removing someone from title later isn’t necessarily as simple as signing their name off.
  • The remaining owners may need to requalify for the mortgage.
  • A transfer of ownership may involve legal fees, lender approval and potentially tax consequences.
  • Future borrowing capacity for each person may also be affected because the vacation-home mortgage is part of their overall liabilities.

8. Talk about the uncomfortable scenarios now

Before purchasing, I would encourage every family to answer one simple question:

“What happens if our relationship or financial circumstances are completely different five years from now?”

The goal isn’t to expect problems. It’s to make sure a financial disagreement never has to become a family disagreement.

Recommended professional team

Before removing subjects, I’d recommend the family speak with:

Mortgage Broker → BC Real Estate Lawyer/Notary → Accountant/Tax Advisor → Estate-Planning Lawyer

Ideally, the legal agreement is prepared before or alongside the purchase, rather than after everyone is already on title.

Bottom line: For a vacation property being purchased by siblings, parents/adult children, or multiple family households, I would generally encourage them to specifically discuss tenancy in common + a comprehensive co-ownership agreement + updated Wills with their BC lawyer before deciding how title will ultimately be registered.  Get advice from your lawyer when deciding what suits your family best. 

This is general information rather than legal or tax advice;

The right structure depends heavily on who is contributing the money, who will use the property, and what everyone wants to happen to their share in the future.