Ongoing interest rate cuts are essential: CPA Canada

TORONTO and OTTAWA, Ontario and MONTREAL, Dec. 11, 2024 (GLOBE NEWSWIRE) — The Bank of Canada has delivered another cut, reducing its policy rate by 50 basis points to 3.25 per cent, in a continued response to mounting economic pressures. CPA Canada’s Chief Economist, David-Alexandre Brassard, says this latest move substantiates the Bank’s shifting focus from inflation to the slowing economy.

“Slowing wage growth and unemployment at a seven-year high—excluding the pandemic—signal that the economy needs support,” says Brassard. “The decision to cut rates now will provide relief ahead of potential tariff turbulence under Trump’s administration.”

Last week, CPA Canada called for a significant rate cut to address six consecutive quarters of declining GDP per capita and rising unemployment.

With ninety-four per cent of Canadians expecting financial stress this holiday season, CPA Canada’s experts emphasize that budgeting remains critical despite the policy shift.

“While the expected rate cut will ease debt repayment burdens for mortgage holders in particular, it won’t reverse price hikes,” says Li Zhang, CPA Canada’s financial literacy leader. “As the holiday season approaches, Canadians should create budgets and stick to them, resisting the urge to overspend regardless of interest rate cuts.”

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