By the numbers

Canada's central bank carries out monetary policy by influencing short-term interest rates. It does this by raising and lowering the target for the overnight rate, which is the interest rate at which major financial institutions borrow and lend one-day (or "overnight") funds among themselves. Not surprisingly, the overnight rate has a strong impact on the rates Canadians get from their lending institutions when they save or borrow money.

To help the average Canadian get a better grasp on the overnight lending rate, CREB®Now presents some of the key numbers.

Speaking as part of Calgary Economic Development's (CED) 2016 Economic Outlook, Bank of Canada governor Stephen S. Poloz laid out his forecast for Canada's economy in the upcoming year.
With more than 1,500 on hand for the presentation, Poloz touched on some of the factors that have seen Canada's economy get off to a less-than-stellar start this year.
CREB®Now takes a look at some of the key points from CED's outlook.

GDP
Having seen two consecutive quarters of GDP decline, Canada's economy currently fits the definition of being in a recession. Looking forward, TD forecasts call for an annual growth rate of
1.2 per cent in 2015, followed by two per cent gains in 2016 and 2017.

Employment
Speaking on downsizings in Calgary's energy sector, CED president and chief executive Mary Moran said more layoffs should be expected, calling it the most challenging time for the city since the mid-1980s. ATB economist Todd Hirsch has predicted unemployment rate in the province could reach 7.5 per cent, which would be the highest rate seen since 2009.

Short-term fixed re-emerging as alternative

Variable rates are back in fashion after the Bank of Canada lowered the overnight  lending rate in January, and economists expect another decrease in the near future.

Yet, even though variable rates make sense, most borrowers are still leaning toward fixed-rate mortgages for no reason other than certainty. Consumers like to know what their mortgage rate is going to be.

The good news is there are options for risk-averse borrowers who don't want to dive into the variable-rate waters, but still want the low rates that come with the floating products.

For the first time since September 2010, the Bank of Canada has changed the overnight interest rate. By decreasing it.

The rate is now 0.75 per cent.

In a release from the bank:

The Bank of Canada has maintained the overnight interest rate at one per cent - unchanged since September 2010.

Here's the statement from the bank (published Dec. 3) :

The Bank of Canada today announced yesterday it was maintaining its overnight rate at 1 per cent.

"Inflation is close to the two per cent target and is evolving as the Bank anticipated in its July Monetary Policy Report (MPR)," said a release from the Bank. "Recent data reinforce the Bank's view that the earlier pickup in inflation was attributable to the temporary effects of higher energy prices, exchange rate pass-through, and other sector-specific factors rather than to any change in domestic economic fundamentals."