Bank of Canada hearing less ‘catastrophic’ tariff talk from businesses

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OTTAWA — The Bank of Canada says trade-sensitive businesses are talking less these days about their “worst-case” scenarios from the trade dispute with the United States.

The central bank held its benchmark interest rate steady at 2.75 per cent for a second consecutive decision yesterday as it gathers more data related to the tariff disruption.

Deputy governor Sharon Kozicki says in prepared remarks for a speech in Toronto today that the Bank of Canada is leaning more on its regular surveys of businesses and consumers as well as specific industrial consultations.

Heading into its latest decision, she says the central bank was hearing less about “catastrophic outcomes” from businesses in industries affected by trade tensions compared to the start of the dispute — even as firms broadly expect the economy to take a hit this year.

Kozicki says monetary policymakers still value traditional data from Statistics Canada, but that information is sometimes too high-level and out of date to help make decisions in uncertain times.

Bank of Canada governor Tiff Macklem said Wednesday that the central bank will still be less forward-looking than usual as it gears up for its next interest rate decision on July 30.