Ottawa and the Bank of Canada renew 2% inflation target through 2031
The five-year agreement keeps the 2% target as the midpoint of a 1% to 3% control range through December 31, 2031.
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Ottawa and the Bank of Canada have renewed the 2% inflation target for five years, through December 31, 2031, in a joint statement dated November 5, 2026. The target is the yardstick the central bank uses when it sets interest rates, which shape what borrowers pay on mortgages and loans and what savers earn.
The Department of Finance Canada's joint statement keeps 2% as the midpoint of a control range, measured as annual inflation, and says the bank will treat deviations above and below target symmetrically.
The last time this came up, in 2021, the renewal added explicit labour-market language: the bank was to use the range to actively seek maximum sustainable employment when conditions warrant.
The Bank of Canada says the 2% target "has served Canadians well in recent decades." The material contains no statement from the finance minister and no dissenting view.
The renewal was announced the same day federal Liberals released economic projections in Budget 2026, tabled Thursday. The Bank of Canada raised its benchmark rate last week, its first increase in three years, citing a fear that inflationary pressures could start to spread. The current agreement runs to December 31, 2026, so the next renewal decision com
