UBS said it expects the April monetary policy report (MPR) to be released on Wednesday to include a box on the impact of the oil price shock on the outlook for the Canadian economy.
In the January Monetary Policy Report (MPR), the BoC assumed: "Over the projection horizon, the per-barrel prices for oil are assumed to be US$60 for Brent, US$55 for West Texas Intermediate and US$45 for Western Canadian Select. These prices are $5 lower than assumed in the October Report."
Brent futures have settled around US$82/barrel by December 2026 and US$75 by December 2027. The latest projections will likely be adjusted to take on board a higher path for oil, writes the bank in a note to clients.
UBS expects little change to its core inflation projections, not just based on the March data, but also the model-implied impact of energy shocks on core prices in Canada is relatively limited.
The bank predicts the BoC marks down its expectations for Q1 gross domestic product growth and that could weigh on its annual expectation for growth, depending on the extent of the revision and whether this growth is redistributed.
The BoC also announced on Monday two new deputy governors with the departure of Deputy Governor Rhys Mendes on April 10 and the retirement of Deputy Governor Sharon Kozicki on July 15. Marc-Andre Gosselin and Nicolas Vincent will join the governing council as deputy governors, effective May 25 and Aug. 3, 2026, respectively.
Gosselin has led the BoC Economic Analysis Department since 2019 and was the deputy managing director of the financial stability department before that.
Vincent already sits within the governing council, and has been an external deputy governor since 2023. The BoC will launch a recruitment process for the soon-to-be vacant external deputy governor position.
This leaves the tally of members at the April meeting at six, with Mendes' departure ahead of the meeting and a replacement not joining until May 25.
UBS doubts this matters much for the policy decision and the council will be back to a full complement by the June meeting. While Kozicki is set to retire July 15, the same day as the July policy announcement, the bank expects she won't participate in that meeting. Whether six or seven members are present for that meeting will depend on how quickly the vacant external deputy governor position is filled.