Canada Market Update: September 2026
By Elliot Higgins – Originator
Bank of Canada Holds Policy Rate, For Now
The Bank of Canada held its overnight rate at 2.25% on September 2nd, but this month’s rate announcement came with a more cautious tone. The Bank noted that the economy remains in excess supply, with unemployment around 6.5% and wage growth subdued, but inflation has been hovering near 3% and the risks from elevated energy prices have increased. The Bank specifically flagged the possibility that prolonged high oil and gasoline prices could spill into broader inflation and require a monetary-policy response.
Odds of a December rate hike have increased following the recent surge in oil prices. The most recent guidance from the banks had generally called for a hold through the end of the year, but sentiment has since shifted as several measures of inflation point to a hike being justified before year-end.
This rate volatility is exactly why we continue to emphasize getting ahead of financing needs and locking in rates early where available.
Multi-Family Sector Sentiment Improving
Largo attended the Canadian Apartment Investment Conference in September, where the overall sentiment was encouraging and pointed toward an eventual recovery in the multi-family sector following some short-term headwinds.
Benjamin Tal, Managing Director at CIBC Capital Markets, noted that the current period of volatility caused by geopolitical conflicts and tariffs cannot continue indefinitely and that a resolution will eventually come. Panelists generally expected interest rates and cap rates to remain elevated in 2027, but there was a growing sense that the apartment market is turning a corner.
Investment in Canada is also becoming more attractive, with international investors increasingly looking to Canada for its stable policy environment and safe-haven status for capital. Panelists pointed to a more constructive immigration policy and progress on the Canadian trade agreement as key catalysts for the sector over the next year – though the current caps on immigration remains a major hurdle for rental demand, and any easing there would be a meaningful tailwind.
Canadian Investment Summit – $500 Billion Committed
Mark Carney hosted the inaugural Canada Investment Summit in Toronto this week, bringing together some of Canada’s largest institutional investors, pension funds and asset managers. The Summit resulted in nearly $500 billion of announced investment commitments, including almost $100 billion from Canadian pension funds, insurers and institutional investors. CPP Investments and Brookfield launched a $50 billion investment vehicle focused on infrastructure and strategic industries, while PSP Investments, Ontario Teachers’ and Sun Life also announced significant increases in Canadian investment.
Institutional capital is moving back into Canada. After a couple of years of slowed transaction volumes, this level of commitment signals growing confidence in Canada’s economic outlook and policy stability. If the government and funds follow through, it could mean a meaningful pickup in transaction activity and renewed appetite for deals that were previously sitting on the sidelines.
