Canada's interest rates to stay low given headwinds: central bank

By Leah Schnurr

QUEBEC CITY, Quebec (Reuters) – Canadian interest rates will stay low for longer as the economy faces strong headwinds and business investment is weaker than expected, but government spending on infrastructure will help growth, Bank of Canada Governor Stephen Poloz said on Tuesday.

In a speech suggesting the central bank will remain on the sidelines even as the economy struggles to gain traction, Poloz said businesses need to adjust their expectations for return on investment given the low interest rate environment.

“There is no smoking gun to suggest that the bank is ready to provide more stimulus here. They acknowledge that there are significant headwinds that require in exchange very stimulative monetary policy,” said David Tulk, chief Canada macro strategist at TD Securities.

“But it’s more just of the view that this is the environment we are sitting in as opposed to saying we need to do …