What the Bank of Canada's January 2026 MPR means for Canadian growth capital

Following the Bank of Canada's January 28, 2026 Monetary Policy Report, the target for the overnight rate remained at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. The Bank projected annual average GDP growth of about 1.1% in 2026 and 1.5% in 2027, with inflation expected to stay near the 2% target.

For Canadian SMEs and growth-stage firms, the policy stance matters because it anchors variable-rate borrowing costs and influences bond yields that drive fixed-rate term loans. When financing capex or working capital, stress-test scenarios where trade uncertainty keeps growth modest even as rates stay on hold.

Sources: Bank of Canada, Interest Rate Announcement and Monetary Policy Report (January 28, 2026). Figures cited are public and may change; this article is informational, not financial advice.