Most Canadians Expect Higher Inflation. Why the Bank of Canada Cares, and What It Means for Your Mortgage
A new Nanos poll finds 54% of Canadians expect inflation to rise over the next year. Expectations matter to the Bank of Canada because they can feed into prices themselves.
The short version
- A Nanos Research poll for Bloomberg, taken 27 to 29 September, found 54% of Canadians expect inflation to be higher a year from now than today's 3%. About a third expect it to be about the same, and 7% expect it to be lower.
- The Bank of Canada's policy interest has been 2.25% since its cut on 29 October 2025. Its next announcements are 28 October and 9 December.
- Bloomberg reports that swaps traders put about one-in-three odds on an increase on 28 October. Market pricing is not a decision, and it moves quickly.
- The Bank publishes its own business and consumer surveys on 19 October. If you hold a variable-priced mortgage, know how your payment would change; if you renew in the next few months, speak to a broker before your lender's offer arrives.
What the poll found
A majority of Canadians expect inflation to rise, according to a Nanos Research poll for Bloomberg News reported on 6 October 2026.
As Bloomberg's report, republished by Canadian Mortgage Trends, sets out, 54% of respondents think the yearly change in consumer prices will be higher than the current 3% by this time next year. About a third said it would be about the same, and just 7% said it would be lower. The survey of 1,057 Canadians ran from 27 to 29 September by telephone and online, and Bloomberg describes it as accurate within three percentage points, 19 times out of 20.
Nanos Research's founder, Nik Nanos, described the results as reflecting an "anxious, dour mood" among Canadians. It is one poll, and what people expect is not the same as what happens.
Why a central bank cares what people expect
Bloomberg's reporting explains the concern. The longer inflation expectations stay elevated, the greater the risk that people build above-target inflation into their behaviour, for example by asking for larger wage increases or bringing purchases forward. That behaviour could add to the price pressures the Bank is trying to contain.
Governor Tiff Macklem warned last month that if policymakers are slow to respond to sustained high inflation, the Bank may have to raise borrowing costs higher and faster later. He also said that raising them unnecessarily could weaken growth during an uncertain period. Our earlier piece on the split among forecasters ahead of October covers how economists are weighing that trade-off.
Bloomberg reports that inflation has held near 3%, the top of the Bank's one to three per cent control range, for months, after gasoline prices rose from February. The Bank's own data show headline inflation at 3.0% in August. Officials are debating whether the current policy interest of 2.25% is enough to keep price pressures in check. For the difference between headline and core measures, see which inflation number mortgage holders should watch.
The dates that matter
- 19 October: the Bank of Canada releases its business outlook and consumer surveys, which Bloomberg says will offer further insight into inflation expectations.
- 28 October: the Bank's next announcement, published with its Monetary Policy Report, according to the Bank's 2026 schedule. Bloomberg reports that overnight swaps put the odds of an increase at about a third.
- 9 December: the last announcement of 2026.
Bloomberg also notes that traders expect more than 100 basis points of increases over the next 12 months. That is what markets are pricing today. It is not a commitment by the Bank, and the figure can change with the next data release.
What a change would mean in dollars
A variable-priced mortgage follows the lender's prime, which moves with the Bank's decisions. Whether your payment moves depends on your product. Some variable mortgages hold the payment fixed and shift the split between interest and principal. Others adjust the payment when prime moves.
Here is an illustration, using a $500,000 balance and a 25-year amortization with monthly compounding, as variable mortgages use. At 4.00% the payment is about $2,639 a month. At 4.25% it is about $2,709, roughly $70 more. At 5.00% it is about $2,923, roughly $284 more than at 4.00%. These figures are illustrative only. Your actual pricing, compounding and payment depend on your lender and the final terms of your mortgage.
If your renewal is coming up
Fixed-term pricing follows bond yields rather than the Bank's decisions directly, so it can move before or after a policy announcement. If your term ends in the next few months, it is worth understanding your options before your lender's renewal offer arrives. The 120-day renewal window explains when offers typically arrive, and our variable discount arithmetic shows how a discount to prime can be affected by increases.
We do not know what happens next, and no one reliably does. A written comparison of your options, with the terms and penalties spelled out, is more useful than a guess.
Nearly thirty years in Canadian financial services, based in Waterloo Region and working across Ontario. Most people are handed a product — you deserve a plan.
General information only. Poll results and market pricing are not forecasts, and nothing here predicts a Bank of Canada decision. Payment figures are illustrative, not a quote or an offer of credit. The Financial Collective is a mortgage planning practice serving clients across Ontario. All mortgage applications are subject to lender approval and satisfactory review of credit, income and property. Product features and pricing are subject to change without notice and vary by lender, term and borrower qualification.
Sources: Bloomberg via Canadian Mortgage Trends, Canadians expect higher inflation as Bank of Canada weighs hikes (6 Oct 2026) · Bank of Canada, Policy interest and 2026 announcement schedule · Bank of Canada, Summary of key monetary policy variables