The Bank of Canada is holding its benchmark interest rate at 2.25 per cent assuring Canadians that it will be a “source of stability” in response to “shifting global developments.”

The United States has imposed 50 per cent tariffs on a variety of Canadian goods, while Canada will introduce counter-tariffs on U.S. imports starting next week.

Governor Tiff Maklem says new U.S. tariffs and increased trade uncertainty pose risks to a rebound in economic activity, and if tariffs remain in place, they will “hit targeted sectors hard.”

“But we don’t expect them to have a large, direct impact on the overall level of economic activity in Canada” says Maklem.

“Affected products affect about 5 per cent of exports to the United States, and the federal government support programs will likely mitigate some of the harm, however the situation does remain fluid.”

He says the uncertainty may lead businesses to delay investment and hiring decisions.