The Bank of Canada's summary of deliberations, published November 10, 2026, shows that Governing Council has not ruled out more tightening. Members said there "could be a need to increase the policy rate further" after raising the rate to 2.50% on October 28. They also said decisions will be made one meeting at a time and that they will proceed carefully. The summary also shows a debate over how fast higher energy costs will reach other consumer prices. The outcome of that debate is likely to shape the December 9 decision more than any single data release.

What the Summary Says About the October Decision

The bank publishes a summary of Governing Council's deliberations two weeks after each fixed announcement date. The latest one says members considered two options: holding the policy rate at 2.25% or raising it to 2.50%. The case for holding was that Inflation was concentrated in energy and energy-intensive services, Core Inflation was close to 2%, some slack remained in the economy, and new U.S. tariffs would weigh on growth. The case for raising rested on higher energy prices that were expected to last, expected increases in cost pass-through, a greater risk of persistent broad-based inflation, and a more resilient economy putting less downward pressure on prices.

The council chose the hike, the first increase since July 2023, and the summary does not record a formal dissent. Members agreed that Monetary Policy cannot lower global energy prices, but it can stop them from turning into generalized inflation. They also said that uncertainty "did not mean inaction."

Why Oil Is Driving the Bank's Thinking

The summary says the benchmark oil price was about US$35 a barrel higher than the bank had assumed in its July Monetary Policy Report, because conflict in the Middle East continues to restrict supply. Futures markets now point to high prices lasting longer. Members estimated that energy alone would keep Consumer Price Index (CPI) inflation near 3% for more than a year, even with no spillover to other prices.

Headline CPI has been around 3% since April. Statistics Canada reported 3.1% for September, driven by gasoline. CPI excluding gasoline was 2.2%, and core measures remained near 2%. The October Monetary Policy Report projects headline inflation rising to about 3.5% by the end of 2026, staying above 3% for much of 2027 and returning to 2% by mid-2028.

The key issue is pass-through. Businesses face higher fuel costs and higher prices for imported inputs such as chemicals, plastics and semiconductors. Pass-through has been limited so far, but members expect it to increase, and bank surveys show firms plan to pass on more of these costs. The summary notes a "diversity of views" among members on how quickly and how much this will happen. Near-term inflation expectations have risen, while longer-term expectations remain anchored.

How Growth and Jobs Fit Into the Picture

The economy has been more resilient than expected. The summary says GDP grew 3.3% in the second quarter, and third-quarter growth was tracking near 2%. The bank raised its 2026 growth forecast to 1% and expects about 2% growth in 2027 and 2028. Business Investment is expected to pick up, supported by AI, higher oil prices, the Productivity Mega Deduction and major projects. Housing is expected to stay weak.

The labour market looks softer. Statistics Canada's Labour Force Survey, released November 6, showed employment was little changed in October, down 4,700, while the Unemployment rate rose 0.2 percentage points to 6.7%. Average hourly wages rose 2.2% year over year, which suggests wage-driven inflation is not building. Alberta lost 24,000 jobs, and Ontario's unemployment rate rose to 7.3%. The summary notes that some members saw the labour market as stronger than the headline rate suggested, mainly because private-sector hiring held up while public-sector jobs declined.

What Markets and Surveys Expect

The bank's third-quarter Market Participants Survey, published November 9, was conducted from September 23 to October 1, before the October hike. The survey reports a median expected policy rate of 2.50% by December and 2.75% by March 2027, with rates then holding through 2028. Respondents expected inflation of about 3.0% at the end of 2026 and identified escalating trade tensions as the main downside risk to growth.

Other data due before December 9 include the October CPI and the Senior Loan Officer Survey on November 20. Governor Tiff Macklem is scheduled to speak to the Economic Club of Canada in Toronto on November 24, and Deputy Governor Toni Gravelle will speak in Edmonton on November 18. Separately, on November 5, Ottawa and the bank renewed the monetary policy framework for 2027 to 2031 and kept the 2% inflation target.

Risks for Borrowers and Investors

For households, another increase would put more pressure on variable-rate mortgages and on fixed-rate borrowers renewing in 2027. For the TSX, rate-sensitive groups such as real estate investment trusts, utilities and telecoms are often affected by changes in rate expectations. Banks face trade-offs between wider margins and higher Credit losses. The main risks for the bank are oil prices, which could rise or fall sharply depending on Middle East supply, and the effect of unresolved Canada–U.S. trade tensions, which businesses surveyed after the August breakdown in talks said had worsened sentiment.

Conclusion

The November 10 summary shows the Bank of Canada is still open to another hike but wants more evidence before acting. Governing Council is mainly concerned about energy costs spreading into broader inflation, but members disagree on how quickly that is happening, and the labour market is softening. The October CPI release, business survey results on pricing plans and Macklem's November 24 speech will help indicate whether the council moves again on December 9 or pauses at 2.50%.