Bank of Canada Cuts Interest Rate to 2.5% in September 2025: Employee Rights

Bank of Canada’s Decision

On Sept. 17, 2025, the Bank of Canada (BoC) lowered its key interest rate by 25 basis points to 2.5%.

The Bank Rate dropped from 3% to 2.75%, while the deposit rate is now 2.45%.

“With a weaker economy and less upside risk to inflation, governing council judged that a reduction in the policy rate was appropriate to better balance the risks,” the central bank said in a news release.

“Looking ahead, the disruptive effects of shifts in trade will continue to add costs even as they weigh on economic activity. Governing council is proceeding carefully, with particular attention to the risks and uncertainties.”

Cut After 3 Consecutive Holds

The BoC’s decision comes after the bank kept its key interest rate at 2.75% since March 12, 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 Oct. 29, 2025.

Key Announcement Highlights

• Unemployment rose to 7.1% in August — with job losses largely concentrated to trade-sensitive sectors as US duties continue to affect Canadian businesses. Wage growth continued to ease in the second quarter.
• As expected, Canada’s gross domestic product (GDP) declined by about 1.5% in the second quarter with trade uncertainty weighing heavily on economic activity.
• Business investment dropped in the second quarter as did exports — falling 27%.
• CPI inflation was 1.9% in August. The federal government’s recent decision to remove most retaliatory duties on imported US goods is expected to result in less upward pressure on the prices of these products going forward.
• The BoC expects slow population growth and the weakness in the labour market to likely weigh on household spending in the coming months.

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.