Bank of Canada keeps 2% inflation target in mandate renewal
OTTAWA - The Bank of Canada and federal government have mutually agreed to maintain a two percent inflation target as the central focus of the Bank's mandate. The Bank of Canada's benchmark interest rate is determined independently, yet it derives its inflation-targeting mandate from Ottawa. Announcing the renewal of its five-year mandate, the Bank stated that its inflation target has benefited Canadians in recent decades.
The central bank aims to keep annual inflation within a narrow band of two percent, maintaining flexibility to address economic shocks as needed. Shortly after the Bank's announcement, the federal Liberals unveiled their economic projections and fiscal plan in Budget 2026.
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