Canada renews 2% inflation target through 2031

The federal government and the Bank of Canada have renewed Canada’s monetary-policy framework for five years, keeping the 2 per cent inflation target in place through December 31, 2031.

The target remains the midpoint of a 1-to-3 per cent inflation-control range measured by the consumer price index. The joint statement says deviations above and below 2 per cent are treated symmetrically.

The agreement also preserves flexibility in how quickly inflation is returned to target after major shocks. The Bank retains operational independence for monetary policy and will continue explaining how its decisions are intended to return inflation to target over time.

The renewal sets the framework for future rate decisions; it is not itself a change to the policy interest rate.

Source: Department of Finance Canada and Bank of Canada, joint statement dated November 5, 2026.

Featured image: illustrative Canadian banknotes; photo by PiggyBank on Unsplash, under the Unsplash License. Cropped and resized.