Economic Update for Saint John

As we navigate the winter months in Saint John, the local business community has been keeping a close watch on the national economic indicators that drive decision-making from Uptown retail to the industrial parks on the East Side. With the port city bustling and looking toward spring projects, the cost of borrowing remains a critical factor for growth and investment in New Brunswick.

Bank of Canada Maintains Policy Rate

In a significant update released today, January 28, 2026, the Bank of Canada has announced it is maintaining its policy rate at 2.25%. This decision provides a continued period of stability for borrowers and businesses across the region.

Governor Tiff Macklem highlighted the central bank’s position, noting that while the global outlook remains “little changed,” it is increasingly vulnerable to unpredictable US trade policies and geopolitical risks. For Saint John entrepreneurs and homeowners, holding the rate steady suggests that the central bank is balancing these external uncertainties with domestic stability.

Navigating Global Trade and Tariffs

According to the latest update from the Bank of Canada, the Canadian economy is currently in a phase of “structural adjustment.” Specifically, the economy is adapting to new US tariffs and a shifting global trade landscape. For a port city like Saint John, which relies heavily on trade and export, these global shifts are particularly relevant as exports continue to be buffeted by these restrictions.

The Bank’s January 2026 Monetary Policy Report projects modest growth of 1.1% in 2026. While headline inflation ticked up slightly to 2.4% in December due to temporary factors, the Bank expects it to remain close to the 2% target over the projection period. This is cautiously good news for local businesses planning their budgets, though the national unemployment rate remains elevated at 6.8%.

Key Takeaways for Saint John

• Interest Rates: Held steady at 2.25%, with the next announcement scheduled for March 18, 2026.
• Inflation: Recent data shows 2.4%, but core measures are easing, helping to stabilize long-term cost projections.
• Trade Outlook: The economy is adjusting to US tariffs; local exporters should monitor the upcoming review of the Canada-US-Mexico Agreement.
• Employment: National unemployment is elevated at 6.8%, signaling a softer labor market as businesses adjust.

Frequently Asked Questions

How does the 2.25% rate affect Saint John mortgages?

With the rate held steady, variable-rate mortgage holders will not see an increase in their payments for this period. It provides a stable environment for those looking to enter the housing market in the Kennebecasis Valley and Greater Saint John area, though borrowers should remain mindful of the broader “structural adjustments” the economy is undergoing.

What did Governor Macklem discuss regarding the economy?

Governor Macklem and the Governing Council focused on the balance between controlling inflation which is being pushed around by shelter costs and global trade friction and supporting economic growth. They emphasized that while the policy rate is appropriate now, they are prepared to respond if the outlook on US trade policies shifts further.

Where can I read the full details?

The full press release regarding the rate decision is available on the Bank of Canada’s website, which includes the latest Monetary Policy Report projections.