“Considerable uncertainty remains. But 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 going forward.”
– Tiff Macklem, Governor of the Bank of Canada
The economy has struggled under the burden of tariffs, and with Canadian headline inflation sitting at 1.9% year-over-year in August, central bank policymakers reduced interest rates by 25 basis points (“bps”) to 2.5% on September 17th, 2025.
With some economists flagging concerns over the risk of growth slowing—GDP declined by 1½% in Q2—we hope to offer some insight on how you can prepare yourself. Global finances may be outside of your control, but you can better position your own.
Defensive positioning is often the first reaction to potential challenges ahead, but this term may be misunderstood. Defensive, in this case, simply means proactive. Opportunity does not disappear for individuals who can reconcile short-term pressures without losing sight of their long-term objectives.
The benefit of a plan that’s resilient enough to stick to isn’t just the reassurance that comes with it, but also the potential rewards of staying invested. Finding a trusted advisor to help you align your means with your goals is crucial to taking control of your future.
Even though the federal government decided to remove most retaliatory tariffs—which place upward pressure on Canadians buying goods imported from the United States—sound budgeting could prove more beneficial than usual. The labour market is showing signs of weakness, which could pressure household balances.
While making simple changes such as reducing unnecessary expenses is a good start, being more conservative with impactful choices can significantly benefit you in the long run. An open, transparent conversation with your partner or family as a whole can lead to aligned priorities, defined boundaries, and a renewed interest in taking control of household finances.
Regardless of your budgeting approach, we recommend allocating a portion of your income to manage high-interest loans. For those with variable-rate mortgages, you may now have more breathing room with the Bank of Canada’s recent decision—in other words, you may have more flexibility in paying down other debt obligations with higher fixed rates.
The final day to make eligible RRSP contributions for the 2025 tax year is March 2nd, 2026. The TFSA, on the other hand, has no such deadline—unused surplus carries into the new year. Despite their differences, it may be wise to contribute sooner rather than later.
There are two reasons to consider doing so. On one hand, you’ll thank yourself when it comes time to retire and you have more savings to draw on. Further, by making deposits into your registered accounts, you may be less tempted to access them prematurely thanks to tax-advantaged growth beginning sooner.
Before doing either, however, take inventory of your emergency savings fund. Having a well-stocked reserve can come in handy for unexpected expenses like home repairs, and just as importantly, reduce the likelihood of withdrawing from registered accounts too early. This security blanket offers peace of mind as well as the opportunity for your investment vehicles to mature over time.
Market conditions can change at any moment, and if you find yourself positioned poorly, the losses can be distressing. Having a plan, monitoring it, and making any necessary adjustments for the conditions at hand is paramount to your financial freedom. That being said, an attempt to “time the market” can be far more damaging than the initial losses:
It can be difficult to stay the course when seeing your portfolio value decline—giving it time to recover can be equally challenging in the heat of the moment.
In part, the value of working with a professional is having someone by your side to help you avoid irrational decisions or emotional reactions to temporary pressures.
What can be even more beneficial is working with a fiduciary, who has a legal and ethical obligation to conistently do what’s in your best interest. With Bellwether, that’s exactly what you can rely on—a trusted partner whose goal is helping you achieve yours through growing and protecting your wealth so you can focus on what matters most.
