Bank of Canada cuts interest rate to 2.75% in March 2025: Employee rights

What did the Bank of Canada do?

On March 12, 2025, the Bank of Canada (BoC) lowered its key interest rate by 25 basis points to 2.75 per cent.

The Bank Rate is now three per cent, while the deposit rate is 2.70 per cent.

“The Canadian economy entered 2025 in a solid position, with inflation close to the two per cent target and robust GDP growth,” the central bank said in a news release.

“However, heightened trade tensions and tariffs imposed by the United States will likely slow the pace of economic activity and increase inflationary pressures in Canada. The economic outlook continues to be subject to more-than-usual uncertainty because of the rapidly evolving policy landscape.”

Rate cuts continue

This decision marks the bank’s seventh consecutive rate reduction. It lowered its key interest rate by 25 basis points to three per cent on January 29, 2025.

For a complete list of interest rate changes and detailed insights, visit our full rate change list.

Key highlights from the announcement

• Job growth stalled in February. While past interest rate cuts have boosted demand for labour in recent months, there are warning signs that heightened trade tensions could disrupt this. Wage growth has also shown signs of moderation.
• Economic growth in the first quarter of 2025 will likely slow as the intensifying trade conflict weighs on sentiment and activity.
• Recent surveys suggest a sharp drop in consumer confidence and a slowdown in business spending as companies postpone or cancel investments.
• The negative impact of slowing domestic demand has been partially offset by a surge in exports in advance of tariffs being imposed.
• The temporary suspension of the GST/HST lowered some consumer prices, but January’s consumer price index (CPI) was slightly firmer than expected at 1.9 per cent. In March, inflation is expected to increase to approximately 2.50% as the tax break ends.

When is the next rate announcement?

The next interest rate announcement from the Bank of Canada is scheduled for April 16, 2025.

How does this affect employment?

The central bank’s latest interest rate cut is expected to help stimulate business activity and consumer spending, which could lead to increased hiring.

However, the overall impact on employment will depend on how quickly the broader economy responds to lower interest rates, inflation, and new U.S. tariffs.

Lost your job?

In the event that you’re fired or let go, it’s crucial to understand your employment rights in Canada.

Non-unionized employees can get up to 24 months of severance pay when they lose their job. This includes individuals working full-time, part-time, or hourly in Ontario, Alberta, and British Columbia.

Severance is the compensation Canadians receive from their employer when they are fired without cause.

• Fired for cause? It’s very likely that you are still entitled to full severance pay because employees often don’t meet the conditions necessary for this type of dismissal.

Regardless of a company’s grasp on employment law, they are legally required to provide proper compensation following a termination.

This concept applies during challenging economic conditions, downsizing, the closure of a business, or major public health events such as the COVID-19 pandemic.

WATCH: Employment lawyer Lior Samfiru shares five fast facts about termination without cause on an episode of the Employment Law Show.

Talk to an employment lawyer

If you’ve been fired or let go for any reason, contact the experienced employment law team at Samfiru Tumarkin LLP.

We’ve successfully represented tens of thousands of non-unionized workers in Ontario, Alberta, and B.C.

In addition to severance package negotiations, our lawyers can assist you on a broad range of employment matters, including:

Contact us or call 1-855-821-5900 to get the advice you need and the compensation you deserve.