Will the Bank of Canada raise rates again in December 2026?

The Bank of Canada’s next interest rate decision is on Wednesday, December 9, 2026. On November 10, the Bank published its summary of Governing Council deliberations for the October 28 decision. It shows what the Bank is weighing before the next one.

The short version: members agreed “there could be a need to increase the policy rate further,” but said they would take decisions “one meeting at a time with the benefit of the best available information.” So another increase is possible, not promised. Here’s what it means for your loan payments and budget.

What did the Bank of Canada decide on October 28?

The Bank raised its policy interest rate by a quarter of a percentage point, from 2.25% to 2.5%, according to its October 28 announcement. Governor Tiff Macklem told the House of Commons finance committee on November 3 that it was the first interest rate increase since July 2023.

The Governing Council looked at two options: hold at 2.25% or raise to 2.5%.

The case for holding was that inflation had mostly come from energy, and from services that rely heavily on energy, such as airfares. Inflation excluding gasoline was still 2.2%, and core measures of inflation stayed close to 2%. Some slack remained, and new US tariffs were expected to weigh on growth.

The case for raising was that gasoline, diesel and heating oil cost considerably more than in July and were expected to stay higher for longer. Businesses had mostly absorbed higher costs so far, but Bank surveys suggested they would pass more on to customers over the next year.

The Council chose to raise, to reduce the risk that high energy prices would spread to other goods and services and become persistent inflation.

The numbers behind the decision

• Oil: the benchmark price was about US$35 a barrel higher than the Bank had assumed in July.
• Inflation: CPI inflation has been around 3% since April. The Bank expects it to reach 3.5% at the end of 2026, stay above 3% through much of 2027, then gradually return to the 2% target by the middle of 2028.
• Growth: GDP grew 3.3% in the second quarter and about 2% was expected in the third. The Bank expects growth of 1% in 2026 and 2% in 2027 and 2028.
• Jobs: unemployment was around 6.5%, with the labour market moving sideways since the start of the year.

One line matters for household budgets: even without businesses passing on more costs, members said the energy shock alone would keep CPI inflation around 3% for more than a year.

What could this mean for your loan payments?

The policy rate isn’t the rate you pay, but many lenders’ rates follow it. Variable-rate mortgages and many lines of credit are usually tied to a lender’s prime rate, which tends to move with the policy rate. Fixed-rate loans and mortgages keep their rate until the term ends, so the change reaches you at renewal.

Here’s a hypothetical example, not a real person. Say you carry a $10,000 balance on a line of credit tied to prime, and your rate rises by a quarter point, the same size as the October 28 increase. You’d pay about $25 more in interest over a year, or roughly $2 a month. Small on its own. The harder part is the combination: borrowing costs a little more while everyday prices rise around 3%.

What can you do before December 9?

1. List anything that floats. Write down each variable-rate loan or line of credit, with its balance and rate. Those payments could change again.
2. Check your renewal dates. If a fixed-rate mortgage or loan renews within a year, ask your lender what the payment would be at current rates.
3. Plan for prices around 3%. If your pay isn’t rising that fast, everyday costs take a bigger share of each paycheque. If your cushion already went to bills, here’s how to rebuild an emergency fund.
4. Know what a loan really costs. If you’re borrowing for a gap, compare the total cost, not just the payment. What will a small loan cost me? walks through it.
5. Get free help if debt is piling up. Start here: How do I find debt help in Canada without getting ripped off?

What to watch before the next decision

• Monday, November 16: Statistics Canada releases the Consumer Price Index for October 2026.
• Friday, December 4: the Labour Force Survey for November 2026. For the October numbers, see what Canada’s October jobs report means for your paycheque.
• Wednesday, December 9, 9:45 a.m. ET: the Bank’s next rate announcement.

The Bank said its outlook is subject to considerable uncertainty, including the war in the Middle East, Canada-US trade relations and how far businesses pass on higher costs. It didn’t say what it will do in December, and we won’t guess. Budget 2026 is a separate story: what it means for your paycheque.

A note for employers

Employees may feel this twice: higher fuel and heating costs, and loan payments that rise with rates. If people ask, plain information on renewal dates and free credit counselling helps more than a general reminder to budget.

This article is general information, not financial, legal or credit advice. Buffer is not affiliated with or endorsed by the Bank of Canada.