Canada keeps 2 percent inflation target through 2031
The Government of Canada and the Bank of Canada are renewing their monetary policy framework through December 31, 2031. The agreement retains the 2 percent inflation target and flexibility to support growth and stable labor market outcomes.
Same target, five more years
The Government of Canada and the Bank of Canada (BoC) renewed the framework for five years, ending December 31, 2031.
The target remains 2 percent, the midpoint of a 1 to 3 percent control range, measured by the 12-month change in the consumer price index.
Policy remains symmetric, giving equal emphasis to deviations above and below target.
The BoC independently conducts policy and retains flexibility to respond to shocks while returning inflation to target over time.
Price stability remains its primary focus, supporting growth and maximum sustainable employment.
The government and the BoC review the framework every five years; the inflation target has served as the policy anchor for more than three decades.
Supply shocks reshape policy tools
The statement attributes the past five years' inflation to post-pandemic supply disruptions, changing demand and geopolitical conflicts.
Inflation returned to 2 percent and the 1 to 3 percent range after a difficult adjustment for households and businesses.
The BoC sees an implementation challenge, not a design failure, and has strengthened its capacity to assess supply shocks and policy responses.
The renewal also cites changing trade patterns, reconfigured supply chains, investment flows, demographics and artificial intelligence as forces reshaping Canada's economy.
Continuity puts implementation first
The renewal retains the target rather than redesigning the framework after the inflation episode.
The BoC places the lessons in better assessment of supply shocks and policy responses.
Flexibility remains available, but returning inflation to target remains the stated priority.