Interest Rates
Real Estate Daily Pulse
March 18, Bank of Canada Holds its Interest Rate at 2.25%...
The Bank of Canada announced today that it is maintaining its overnight interest rate at 2.25%, signaling a continued cautious approach to monetary policy. The decision reflects the Bank’s ongoing effort to balance economic growth while keeping inflation close to its 2% target. On March 16 the inflation rate was announced at 1.8%. This is exactly where the Bank of Canada wants it. By holding rates steady, the Bank aims to avoid reigniting inflation while giving previous rate adjustments time to fully work through the economy. Higher borrowing costs have already slowed consumer spending and housing activity, contributing to easing inflation. The Bank emphasized that it remains data-dependent moving forward. If inflation continues trending toward the 2% target, future rate cuts could be considered. However, any signs of renewed inflationary pressure may delay that shift or actually propose a rate increase.
PST on Commercial Real Estate Commissions causing turmoil.
In the 2026 BC budget, the provincial government in their infinite wisdom, proposed expanding the Provincial Sales Tax (PST) to certain professional services, including non-residential real estate commissions, rental property management and strata management services, among others, at 7% effective October 1, 2026 if the budget legislation receives royal assent.
This isn’t just a new cost — it’s a tax on business inputs at a time when the real estate market is already depressed, squeezing margins and driving up costs for landlords and and investors. Business groups are urging the government to scrap this planned PST expansion altogether because it will add yet another layer of expense and discourage investment in a sector that’s struggling to recover.
So far, the plan has not been rolled back, and the tax is still scheduled to take effect later this year unless the legislature changes course in response to the uproar.