The Bank of Canada maintained its target for the overnight rate at 2.75% on July 30, 2025. While some elements of American trade policy have started to become more concrete in recent weeks, trade negotiations continue, threats of new sectoral tariffs continue, and U.S. trade actions remain unpredictable, according to the Bank.

While U.S. tariffs have created volatility in global trade, the Bank reports that the global economy has been reasonably resilient. In Canada, U.S. tariffs are disrupting trade but overall, the economy is showing some resilience so far. After robust growth in the first quarter of 2025 due to a pull-forward in exports to get ahead of tariffs, GDP likely declined by about 1.5% in the second quarter. The Bank attributes this contraction mostly due to a sharp reversal in exports following the pull-forward, as well as lower U.S. demand for Canadian goods due to tariffs.

To support the Canadian economy, the Government of Canada has introduced the Building Canada Act as part of Bill C-5, the One Canadian Economy Act. According to Prime Minister Mark Carney, a seasoned economist and environmentalist, Canada needs to use all the tools at its disposal to get major projects built that will deepen trade relationships with reliable partners and create good Canadian jobs. Ministers across the country have agreed on the urgency of building major projects that produce and connect clean and conventional energy, goods and services to markets across Canada and the globe.