Bank of Canada Plans to Keep Benchmark Interest Rate near Zero for the Next Two or More Years

Bank of Canada Plans to Keep Benchmark Interest Rate near Zero for the Next Two or More Years

  • Business
  • Economy
  • Finance
July 24, 2020

The economy is slowly recovering and is expected to take many years for it to return to pre-COVID level. Tiff Macklem, governing council for the internal committee that sets monetary policy, plans to keep the benchmark rate at 0.25% until “economic slack is absorbed so that two per cent inflation target is sustainability achieved.

The policy will bring cash into the market dictating consumer behavior from saving to spending. Since saving will not generate income, this will bring billions of cash into the market. This will help Canadian and Canadian businesses throughout the upcoming years. This is a policy that would continue, Macklem emphasized.

Bank of Canada is known for a stable interest and inflation rate keeping expectation consistent over the years and does not like to intervene with the market. In special circumstances, a recession caused by COVID, they will guide the economy. To keep the rate at 0.25% for many years to come will bring confidence to the market and people can take advantage of the new interest rate without worrying a sudden change or make panic decisions.

The Bank of Canada predicts the GDP could contract 6.8% this year, before rebound by 4.9% next year and 3.2% in 2022. Canada have avoided the worst-case scenario, but when will we return to pre-covid level is still uncertain until a solution is in place to deal with the virus.

The CPI declined 0.4% in May compared to the previous year. The cost of food is rising, but low demand will slow down inflation considerably until at least 2022 which estimates CPI to be around 1.7%. As the recovery occurs, supply is exceeding demand mainly due to spending going into necessities and cost of other goods are continuing to go on sale.

Bank of Canada forecast “the economy is short of what is expected to be in 2022 and potential growth rate will be at zero for the foreseeable future.” The message from the Bank of Canada is to boost consumption and investment and the low interest rate will be the biggest stimulus package.

If you need help navigating through the low-interest rate environment in the Vancouver commercial real estate market, speak to our team of advisors! If you need help with your retirement plan, answering questions like, How long will my money last? How much can I spend so I won't run out? When should I take government benefits like CPP and OAS? Which of my assets should I spend first? Speak to one of the top retirement planners in Vancouver today.

Yoyoe Lu

Founder and managing principal

Yoyoe is the founder and managing principal of Claridge. She was ranked one of Vancouver’s top real estate agents. Currently, Yoyoe is our strategic mind leading the team to success. Her affiliation with industry professionals put her ahead of our competitors. Yoyoe is also part of the Rotary Club of West Vancouver, Canadian Homebuilders Association, Urban Land Institute and Urban Development Institute.

Ashley Osborn

Development Site and Investment Specialist

Ashely is our lead land and investment advisor. He has been consistently featured in the annual top 100 real estate deals of British Columbia ranking. With over $15 billion worth of domestic and international real estate investments under his belt, Ashley is one of the top agents in the province. His 20 years of real estate and financial experience make him a master in negotiation and acquisition.

Patricia Wong Chong

Investment and Leasing Specialist

Patricia is our investment and retail leasing advisor. Her experience in brokerage and market research analysis has helped her comprise over $550 million in commercial real estate transactions. Patricia is responsible, detail-oriented, and professional. Her strong work ethic and positive attitude have led her to surpass all her competitors.

Schumann Li

Land Assembly & Residential Specialist

Schumann is a top-producing realtor in the Lower Mainland with more than 30 years’ experience. Over the years, Schumann hasn’t just garnered awards, but the trust of countless customers. Her clients continually refer to her outstanding professionalism, work ethic and poise.

Wendy Kaip

Sales Associate

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Prior to real estate, Wendy spent over a decade in the mining industry with her attention to detail, keen negotiation skills, extensive network and strong reputation for getting the deal done, bringing endless value to her current real estate clients.

Whether you are thinking about selling to a developer, or have more questions about commercial real estate, Wendy invites you to connect, to see how she can utilize her expertise and team to help create value and maximize your real estate goals.

Simon Chan

Managing Broker

Simon is the managing broker of Claridge Real Estate Advisors Inc. His expertise has helped our agents resolve many difficulties. Not only is Simon knowledgeable with real estate legislation, but he is also very detail orientated. With Simon on our team, our agents are confident to conduct businesses and will always get the support they need to ensure they’re not walking on dirty water.

Frank Zhou


As the analyst of the company, my key job is to help brokers to find marketable clients and locate feasible development sites by collecting and analyzing up-to-date market transaction data and conducting target market and property-level research. Meanwhile, I am also in charge of maintaining the company’s property database to ensure accuracy and comprehensiveness and continuously upgrading the level of knowledge by staying up to date with hot topics, and market trends, and incorporating findings into everyday work. Before joining the company, I worked for CR Group as a real estate investment manager, focusing on capital raising, equity and debt financing, acquisition and renovation. I hold 2 master’s degrees, one in Housing Management and the other in Economics.