Joint Statement of the Government of Canada and the Bank of Canada on the Renewal of the Monetary Policy Framework
Canada’s Government and central bank renewed the inflation-targeting framework for another five years, reaffirming the 2% target to maintain price stability and support economic growth amid global uncertainty.
The Government of Canada and the Bank of Canada jointly renewed the monetary policy framework, agreeing that keeping inflation low, stable, and predictable remains the best way to protect Canadians from rising living costs. The framework’s renewal follows five years marked by global shocks, including supply chain disruptions and geopolitical conflicts, which pushed inflation higher worldwide. During this period, the Bank of Canada acted decisively to restore price stability, bringing inflation back to the 2% target within the 1% to 3% control range. The Bank views the recent inflation episode as a challenge to implementation rather than a failure of the framework’s design.
The Bank of Canada has strengthened its analytical capacity to better assess how global and domestic supply-side shocks affect Canadian inflation and how policy should respond to persistent shocks. It remains committed to applying these insights with vigilance and clarity within the existing framework. The Government and the Bank agree that price stability protects household purchasing power and enables businesses to plan and invest with confidence. The 2% inflation target, in place for over three decades, continues to serve as a clear and credible anchor for monetary policy decisions.
Canada’s economy faces profound changes, including shifting trade patterns, reconfigured supply chains, and the adoption of artificial intelligence, alongside heightened geopolitical uncertainty. Against this backdrop, the Government and the Bank reaffirm that maintaining low, stable, and predictable inflation is the best contribution monetary policy can make to Canadians’ well-being. The renewed framework allows for flexibility in implementation to support economic growth and strong labour market outcomes while keeping inflation anchored.
The Government of Canada and the Bank of Canada jointly reaffirmed their commitment to the inflation-control target, emphasizing its role in safeguarding the value of Canadians’ money and promoting a stable economic future. The renewal underscores the shared dedication to price stability as a foundation for economic resilience, even as global and domestic conditions evolve. The framework’s continuation reflects confidence in its ability to deliver low and predictable inflation over the next five years.