Bank of Canada Cuts Interest Rate to 2.25% in October 2025: Employee Rights

Bank of Canada’s Decision

On Oct. 29, 2025, the Bank of Canada (BoC) cut its key interest rate by 25 basis points to 2.25%.

The Bank Rate dropped from 2.75% to 2.5%, while the deposit rate is now 2.2%.

“With the effects of US trade actions on economic growth and inflation somewhat clearer, the Bank has returned to its usual practice of providing a projection for the global and Canadian economies in [the latest] Monetary Policy Report,” the central bank said in a news release.

“If inflation and economic activity evolve broadly in line with the October projection, Governing Council sees the current policy rate at about the right level to keep inflation close to 2% while helping the economy through this period of structural adjustment. If the outlook changes, we are prepared to respond.”

Second Consecutive Cut

The BoC’s decision comes after the bank lowered its key interest rate to 2.5% on Sept. 17, 2025.

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

Next Rate Announcement

🗓️ The next interest rate announcement from the Bank of Canada is scheduled for Dec. 10, 2025.

Key Announcement Highlights

• Canada’s economy contracted by 1.6% in the second quarter — reflecting a drop in exports and weak business investment amid heightened trade uncertainty. While the global economy has been resilient to the historic rise in US duties, the impact is becoming more evident.
• The unemployment rate remained at 7.1% in September and wage growth has slowed. Job losses continue to build in trade-sensitive sectors and hiring has been weak nationwide.
• Global financial conditions have eased further since July and oil prices have been fairly stable. The Canadian dollar has depreciated slightly against the US dollar.
• Trade relationships are being reconfigured and “ongoing trade tensions” are dampening investment in many countries.
• Household spending grew at a “healthy pace” in the second quarter — despite heightened trade uncertainty.

How Does this Affect Employment?

The BoC’s decision to keep interest rates lower is aimed at stimulating business activity and consumer spending, which will hopefully lead to increased hiring.

However, the overall impact on employment will depend on how the broader economy reacts to lower rates, inflation, and US trade uncertainty.

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 (BC).

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

• Fired for cause? It’s very likely that you’re 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’re legally required to provide proper compensation after firing staff.

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: 5 Key Facts About Termination “Without Cause”

Contact an Employment Lawyer

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

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

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.