Canada Renews Monetary Policy Framework: 2% Inflation Target Kept, Agreement Runs Through End of 2031
The Government of Canada and the Bank of Canada issued a joint statement in Ottawa on November 5 renewing the monetary policy framework that the two institutions review every five years. They agreed that monetary policy must work to promote the economic and financial well-being of Canadians, and that the best way it can do so is by keeping inflation low, stable and predictable, protecting Canadians from large increases in the cost of living.
Under the renewed framework, the inflation target remains 2%, the midpoint of the 1% to 3% inflation-control range, with inflation measured as the 12-month rate of change in the consumer price index. Monetary policy will continue to be conducted in a symmetric manner, with equal emphasis on deviations above and below the target, and the Bank will continue to use the flexibility of the framework to respond to economic shocks while maintaining a clear focus on returning inflation to target over time.
The statement recalled that over the past five years the global and Canadian economies were hit by repeated shocks: post-pandemic supply chain disruptions, rapid shifts in demand and geopolitical conflicts pushed up inflation around the world, including in Canada. The Bank of Canada acted forcefully to restore price stability, and inflation returned to the 2% target and the 1% to 3% control range. The two sides said the experience reinforced the value of a clear and credible inflation-targeting framework.
They also noted that the framework is being renewed as Canada's economy faces profound change and heightened geopolitical uncertainty: international trade patterns are being redrawn, supply chains are being reconfigured and global investment flows are shifting, while demographic shifts, the widespread adoption of super intelligence (SI) and other structural forces will continue to alter the economy. Price stability, they said, protects the purchasing power of households, allows businesses to plan and invest with confidence, and supports maximum sustainable employment and economic growth.
The agreement will run for another five-year period, ending December 31, 2031. The Government and the Bank said they remain committed to ensuring that monetary policy supports the economic and financial well-being of Canadians and to safeguarding the value of Canadians' money.
(Source: Bank of Canada)
Source: Bank of Canada
Published by GSM · USA (original Chinese edition)
Photo: 图：位于渥太华的加拿大银行大楼。shankar s. 摄，CC BY 2.0，经 Wikimedia Commons。 / Photo: The Bank of Canada building in Ottawa. By shankar s., CC BY 2.0, via Wikimedia Commons.
