Bank of Canada releases results from consultations on inflation and monetary policy

Why we reached out

Every five years, we renew our monetary policy framework with the federal government. Before every renewal, we conduct research and talk to experts about how effective the [current framework][1] has been at keeping inflation low, stable and predictable.

This time, we expanded these discussions to include a broad range of public interest groups and individual citizens.

We wanted to know what Canadians thought about the economy, our current monetary policy framework and the options being considered. We also asked questions about the Bank’s other policy tools.

That’s why we conducted surveys, focus groups and round-table discussions, and we invited written submissions from individuals and groups.

Why this matters

For the first time in 30 years, we’re comparing our current, flexible inflation-targeting framework against a range of other options:

• average inflation targeting
• dual mandate (that targets inflation and employment)
• nominal GDP targeting
• price-level targeting

So we need to explore how any changes might affect households and businesses. Conducting these consultations also allowed us ask individual Canadians and groups about the policy actions we have taken in extraordinary times, such as our [response to COVID‑19][2].

Talking to more people provides us with greater diversity of perspectives and gives us an opportunity to better explain our work. It is important that we understand what Canadians think and that Canadians understand our objectives and how we achieve them. Monetary policy works best when it’s well understood.

1. www.bankofcanada.ca/2016/10/renewal-of-the-inflation-control-target-2016/
2. www.bankofcanada.ca/markets/market-operations-liquidity-provision/covid-19-actions-support-economy-financial-system/