Interest rate cut could spur Lethbridge businesses and real estate

The Bank of Canada has once again cut its key lending rate, but what will that mean for southern Albertans as the trade war rages on?

The interest rate has been cut 25 basis points down to 2.75 per cent.

It marks the seventh consecutive cut by the Bank of Canada.

The move comes as the country braces for the full impact of the ongoing trade war with the United States.

“We ended 2024 on a solid economic footing. We are now facing a new crisis depending on the extent and duration of new U.S. tariffs. The economic impact could be severe. The uncertainty alone is already causing harm,” said Bank of Canada Governor Tiff Macklem.

The rate cut was widely expected and could help to spur consumers to spend more.

Local business owners certainly hope this is the case.

“In general, a bank rate cut is good news for the local economy. It means hopefully consumers are a little looser with their wallets and are looking to spend more, which drives retail businesses and other businesses across the city,” said Trevor Lewington, CEO of Economic Development Lethbridge.

While it’s good news for businesses, it could be the sign of troubled times ahead for Canada.

Lowering the rate could mean the Bank of Canada is preparing for a recession.

“This is a bit of a signal from them. They’re willing to use their tool, which is interest rates, to try and soften the blow. And they’re anticipating perhaps more troubles ahead,” said Lewington.

“Pleased to see sort of a proactive move at this point by the Bank of Canada, and hopefully that they’re willing to make further reductions if it becomes necessary to strengthen our economy.”

The most recent cut could spark some more activity in the local real estate market.

Lower rates could see more current homeowners looking to buy a new home.

That could open up more starter homes for first-time homebuyers.

“It feels like it’s a really cool time. If you bought low and you had a low interest rate that you can kind of like, OK, take that equity, get a decent rate and buy your next house,” said Justin Myer, broker/owner of LethbridgeRealEstate.com.

The next Bank of Canada rate announcement is set for April 16.