On January 20, the Bank of Canada maintained its overnight rate at 0.25 percent. The Bank projects that it should keep this low rate until slack in the economy is absorbed, which will not probably occur until 2023.

The Bank is also continuing its quantitative easing (QE) program, purchasing at least $4 billion of Government of Canada bonds per week. As a result, the Bank expects the Canadian economy will grow 4 percent in 2021 and 5 percent in 2022.

It is generally believed that as vaccinations accelerate in the coming months, the Canadian economic recovery will gain steam in the second half of 2021. Depending on the strength of the recovery, we may see the Bank taper its purchases of government bonds in 2022, which could put moderate upward pressure on 5-year fixed mortgage rates. However, that still means the current extremely low interest rate environment will be around for quite some