The Bank of Canada Is Expected to Hold. The Forecast Underneath That Is the Part Worth Reading

What the Bank is expected to do this week

RBC Economics published its week-ahead outlook on 28 August, and its expectation for Wednesday's Bank of Canada announcement is straightforward: no change. What makes the piece worth a borrower's attention is not that conclusion. It is the reasoning underneath it, which points somewhere most people are not looking.

The bank's economists, Nathan Janzen and Claire Fan, describe a central bank caught between two pressures. New United States tariffs raise the risk to growth. Higher oil prices raise the risk to inflation. Neither, in their reading, is yet strong enough to move the Bank off the sidelines.

both this strength and forward-looking risks— RBC Economics on what it expects the Bank to acknowledge, 28 August 2026

That is a forecast, not an announcement. The Bank speaks for itself on Wednesday. But a forecast from a major Canadian bank's economics team is a reasonable read of where the conversation sits going in, and it is public.

The economy behind the decision is stronger than the mood

If you have been reading headlines about tariffs and assuming the Canadian economy is deteriorating, the backward-looking data tells a different story. RBC points to two figures in particular:

• Gross domestic product grew 3.3% on an annualized basis in the second quarter.
• Core inflation has printed on target in every month since April.

The labour market is more mixed, and this is where the nuance sits. Unemployment fell to 6.4% in July after consecutive strong months of hiring — but RBC attributes part of that decline to a shrinking supply of workers rather than pure strength, citing retirements and reduced immigration. They expect a much smaller gain of about 5,000 jobs in August, with unemployment holding steady.

Their trade forecast follows the same pattern of short-term distortion. The United States announced new tariffs on 20 July that did not take effect until 22 August, and RBC expects that gap prompted American importers to build inventory ahead of time. The result should be a trade surplus widening to roughly $4.2 billion in July from $3.9 billion in June, on exports up about 0.1% and imports down about 0.3%.

The part most borrowers miss

Here is the sentence in the RBC piece that matters most if you have a mortgage, and it is easy to read past. In discussing what a worsening trade dispute might do, they describe it as something that could prompt a delay of the increases they had already expected in 2027 — or, in a worse case, push the Bank toward cuts instead.

Read that the other way round. Their base case already has the Bank's next move being upward, in 2027. The cuts appear only in the pessimistic branch, as a response to economic damage.

That is close to the opposite of the assumption a lot of people are renewing on. The common version goes: borrowing got expensive, it will come back down, so hold on and wait for that. On this forecast, waiting is not a wait for relief. It is a wait for a move that the forecaster expects to go the other way — and the scenario that would deliver the cut instead is the one where the economy is doing badly enough to require it.

What would change it

RBC is explicit that current tariffs, and Canada's counter-tariffs, are not yet large enough to knock the recovery off course. Their concern is escalation from here. That is the variable to watch, and it is genuinely unpredictable — which is precisely why it is a poor thing to build a personal financial plan around.

It also cuts both ways for a borrower. A serious escalation could eventually mean cheaper borrowing. It would arrive alongside weaker employment and slower growth, which is not a backdrop anyone should be hoping for while carrying a mortgage. The scenario that improves your monthly number is the same scenario that could threaten your income.

What this means if you renew in the next twelve months

For an Ontario household with a renewal coming, the practical takeaway is not a prediction. It is a change in posture.

• Do not build the plan on a move that has not happened. A forecast is not a commitment, and this one does not point where most people assume.
• Start earlier than feels necessary. Most lenders will look at a renewal well ahead of the maturity date, which turns a deadline into a decision window.
• Know what your own numbers do under a couple of scenarios — unchanged, somewhat higher, somewhat lower — rather than one hoped-for outcome.
• Treat the offer in the mail as one option, not the option. Your existing lender's renewal letter is a starting position, and comparing it is what a broker is for.

Waterloo Region, London and the rest of southwestern Ontario are not exempt from any of this, and neither is the GTA. The Bank's benchmark is national. What differs locally is the size of the balance it applies to, which is exactly why a national forecast is a poor substitute for looking at your own file.

Turning a forecast into a plan

The honest position on any of this is that nobody in the country knows what the Bank will do beyond Wednesday, and anyone telling you otherwise is selling something. What you can do is stop treating one unknowable variable as the whole decision.

Your qualifying position, the amount outstanding, how long you plan to stay, whether you might sell, and what your household can absorb if the number moves against you — those are knowable, and together they matter more than the forecast does. If your renewal is inside a year, that is the work worth doing now.

If a renewal is what brought you here, the full renewal walkthrough covers the timing and the paperwork. If you are weighing whether to move at all, Next Home Hub deals with the buy-first or sell-first question, and the calculators will model the scenarios above against your actual balance.