Bank of Canada holds interest rate at 5% in April 2024: Employee rights

What happened?

In its monetary policy announcement for April 2024, the Bank of Canada has maintained its key interest rate at 5% for the sixth consecutive time since July 2023.

Amidst fluctuating inflation rates and economic uncertainties, this decision holds significant implications for individuals and businesses alike.

Key highlights from the announcement

• Inflation concerns: While the overall inflation rate has shown signs of cooling, currently at 2.8%, concerns persist. High rent and mortgage interest costs continue to contribute to the inflationary pressure. Core inflation, which excludes volatile sectors like food and energy, has seen a recent downward trend, but the Bank seeks more prolonged evidence before considering rate cuts.
• Future prospects: Governor Tiff Macklem hinted at the possibility of a rate cut in June, contingent upon sustained progress in inflation control. The Bank’s outlook remains cautiously optimistic, expecting inflation to move closer to its 2% target by 2025, supported by solid GDP growth driven by population expansion and increased household spending.
• Rate cut speculations: Economists, including Royce Mendes from Desjardins Capital Markets, anticipate that the Bank may initiate rate cuts as early as June 5, 2024, potentially leading the U.S. Federal Reserve in this regard. This speculation is based on the divergence in economic data between Canada and the U.S., with Canada showing signs of struggle compared to the robust U.S. economy.

When is the next announcement?

The Bank of Canada will make the next announcement about the key interest rate on June 5, 2024.

How does this impact employment?

The decision to hold interest rates steady can influence job stability and growth in Canada.

Lower interest rates generally stimulate economic activity, leading to job creation.

Conversely, maintaining higher rates, as in this case, may slow down hiring as businesses face higher borrowing costs.

Lost your job?

If you find yourself facing job loss, it’s crucial to understand your employment rights.

In Canada, non-unionized employees can get up to 24 months of severance pay when they are fired or laid off from their job. This includes individuals working full-time, part-time, and hourly in Ontario, Alberta, or B.C.

Severance is the compensation a non-unionized worker in Canada receives 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 have been fired or let go for any reason, contact the experienced employment law team at Samfiru Tumarkin LLP.

Our employment lawyers have successfully represented tens of thousands of non-unionized individuals in Ontario, Alberta, and B.C., as well as clients across all Canadian provinces (except Quebec) facing insurance claim denials.

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

If you are a non-unionized employee who needs help with a workplace issue, contact us or call 1-855-821-5900 to get the advice you need and the compensation you deserve.