The Bank of Canada Acts: The Hike Macklem Signaled Has Arrived
What we flagged on October 18 has now happened — context, numbers, and the concrete impact for Quebec borrowers (October 2026)
What just happened
It's done: on October 28, the Bank of Canada raised its policy rate by 0.25%, to 2.50%. It's the first increase since July 2023 — the end of two years of cuts and pauses.
On October 18, in our blog, we wrote that the Bank's tone had shifted and that a hike was "no longer off the table." Ten days later, it happened. The cutting cycle is over.
Why the Bank moved
“The longer the energy surge lasts, the greater the risk it settles into inflation.”
That's the essence of Tiff Macklem's message. Surging energy prices — rising oil, reduced shipments — are pulling inflation toward 3%, well above the 2% target. The Governor didn't close the door on further hikes if the trend persists.
The context in numbers
Three reference points to understand where we stand:
The policy rate
From 2.25% to 2.50% (+0.25%). After peaking at 5%, then falling to 2.25% and a long pause, the Bank is raising its rate for the first time since July 2023.
Inflation
CPI has hovered around 3% for several months, driven by energy, and could climb further by year-end — well above the Bank's 2% target.
What's next
Macklem signaled that further hikes remain possible if inflation settles in. The risk now leans upward, not downward.
What this changes for you
The impact depends on your situation. Four scenarios:
Variable rate
Your payment goes up. As a rough guide, on a $500,000 variable mortgage, each 0.25% adds about $70/month.
Fixed rate
You're shielded: your rate and payment are locked until the end of your term. The hike doesn't touch you until renewal.
Renewal or upcoming purchase
A pre-approval locks a rate for 90 to 120 days. When the next move could be upward, that lock has real value — shop early.
First purchase
Programs (HBP, FHSA, credits) don't move with rates; combining them stays advantageous no matter which way the Bank goes.
What to do now
A hike isn't a catastrophe: it's a signal. There's no reason to panic, but the cutting cycle is over and the risk leans upward. The most useful thing: knowing your precise situation — current payment, room to maneuver, options if rates keep rising. That's what we look at together in a few minutes.
A good plan is built before the announcements, not in reaction. The risk now leans upward.
Anthony King's Recommendation
Now that the hike is confirmed, here are my findings:
- The cutting cycle is well and truly over; planning around a quick drop would be unwise.
- If you're on a variable rate or near renewal, now is the time to look at your options in numbers — not in six months.
- No decisions out of fear: the goal is to have a plan ready for either scenario (more hikes, or a pause).
Anthony King, AMF-certified mortgage broker #254937
Let's take stock of your situation
Variable rate, renewal approaching, or a purchase in view? Write or call me — we'll look at your options together, with real numbers.