Key facts
- The Bank of Canada and the finance ministry renewed the monetary policy framework for another five years.
- The joint statement said the 2% inflation target remains the policy objective.
- The statement said the target has served Canadians for more than three decades.
- The Bank said it strengthened its analytical capacity to assess how supply-side shocks transmit to Canadian inflation.
- The statement said inflation returned to the 2% target and the 1% to 3% control range.
The Bank of Canada and the federal finance ministry unveiled a new five-year monetary policy framework on November 5, 2026 that keeps the inflation target unchanged at 2%, Reuters reported.
The joint statement said the government and the Bank review and renew the framework every five years, after which the Bank conducts monetary policy independently. It said the 2% target has served Canadians for more than three decades and remains a clear anchor for policy decisions, while allowing flexibility in implementation to support growth and labor market outcomes.
The statement said inflation returned to the 2% target and the 1% to 3% control range after the Bank acted to restore price stability following post-pandemic supply chain disruptions and shifts in demand. It said the Bank views the elevated-inflation episode as a challenge to the framework's implementation rather than a failure of its design, and has strengthened its analytical capacity to assess how supply-side shocks transmit to Canadian inflation.
The statement said the renewal comes as trade patterns are being redrawn, supply chains reconfigured and global investment flows shift, with demographic change and adoption of artificial intelligence also altering the economy.