Canadian Small Business Roundup: Rate Hold, a New Pipeline, and the Tariff Picture One Year In

The Bank of Canada made its call on Wednesday, and it was exactly what most people expected. The Bank held its key interest rate at 2.25% and said that any future changes to the rate could be small, as long as the economy tracks close to its projections. Governor Tiff Macklem was careful not to commit to anything beyond that. He said rates are probably at about the right level if the economy follows the central bank's base case, but he did not rule out future adjustments depending on how risks play out.

This was the third consecutive rate hold of 2026, following holds in January and March as well. The Bank is watching two things closely: energy prices driven by the war in the Middle East, and the ongoing pressure from U.S. tariffs. The Bank said it is looking through the war's immediate impact on inflation but made clear it will not allow higher energy prices to become persistent inflation.

What does this mean for your business? If you're carrying variable-rate debt, your payments stay where they are for now. Fixed mortgage rates have actually crept up this spring, rising roughly 25 to 40 basis points since mid-March as bond yields have climbed. So if you're refinancing or looking at a commercial mortgage, the fixed-rate environment is a bit more expensive than it was two months ago, even though the overnight rate hasn't moved. The next decision is June 10.

A New Pipeline, Eventually

President Trump signed a cross-border permit Thursday for the Bridger Pipeline Expansion, a project that would carry up to 550,000 barrels of oil per day from the Canadian border with Montana down through Montana and Wyoming, linking with an existing pipeline. Alberta Premier Danielle Smith was quick to welcome the news. The pipeline has drawn comparisons to Keystone XL given the similar route and purpose, though it is a smaller project.

Before anyone pops the champagne: the project still needs additional state and federal environmental approvals before construction can begin, which company officials expect to start next year at the earliest. The company hopes to finish construction by late 2028 or early 2029. This is a long-term infrastructure story, not a short-term change for Canadian energy exporters. Still, the signal matters. It reinforces that moving Canadian crude south through the U.S. remains a viable strategy, and that access to American export infrastructure is not completely off the table despite the broader trade tensions.

The Tariff Numbers, One Year In

Statistics Canada published a spring 2026 economic summary this week that gives a clearer picture of where things actually stand. The numbers are useful context for any business owner trying to figure out whether conditions are improving or just flattening. By the end of 2025, Canada's nominal exports to the United States were 11.1% lower than pre-tariff levels in March 2025, and 16.7% lower than December 2024. That is a significant contraction that has not fully recovered.

The flip side is that Canadian businesses have been actively finding other buyers. Exports to countries other than the United States ramped up in the second half of 2025 and continued to strengthen into the fall as businesses worked to diversify their customer base. That's a real shift, even if it doesn't fully replace what was lost.

On inflation: consumer price growth slowed to 1.8% in February 2026, the result partly of base effects from the end of the GST/HST break a year earlier. The Bank now expects CPI to hit roughly 3% in April, driven by energy prices, before coming back down toward the 2% target by early next year. Core inflation, which strips out energy, has remained well-behaved throughout.

One Date to Have on Your Radar

CUSMA, the Canada-U.S.-Mexico trade agreement, is scheduled for a formal review starting July 1, 2026. This is a built-in review process that allows all three countries to assess the agreement and decide whether to continue it or negotiate changes. Most trade watchers expect the review to be contentious given the current political environment. If your business relies heavily on cross-border trade, now is a good time to understand your exposure and make sure your supply chain and pricing assumptions are not entirely dependent on current tariff structures staying the same. The review could take months to play out, but the opening positions from all three parties will set the tone quickly.

That's the week. More next Friday.