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The bank has been grappling with a confluence of factors that have clouded the outlook for inflation and the economy. 

Heading into the year, many economists had predicted inflation would ease and a softer economy would keep the Bank of Canada on the sidelines while it waited for clarity on the U.S. trade front. 

But the outbreak of war in the Middle East in late February has led to a surge in oil prices and upended inflation forecasts. 

Bank of Canada governor Tiff Macklem has said the governing council will "look through" the initial spike in inflation — now at 2.4 per cent as of March — driven by the oil price shock but will also ensure those inflationary pressures don't become entrenched. 

This report by ºÃÉ«tvwas first published April 29, 2026.