OTTAWA — The Bank of Canada and federal government have agreed to keep a target of two per cent inflation at the core of the central bank’s mandate. The Bank of Canada sets its benchmark interest rate independently from the federal government but it gets its inflation-targetting mandate from Ottawa. The Bank of Canada said in a release announcing the renewal of its five-year mandate today that its inflation target has served Canadians well in recent decades. The central bank will continue to set monetary policy to make sure annual inflation dips neither too far below or above two per cent, but it retains flexibility to respond to economic shocks. The Bank of Canada increased its benchmark interest rate for the first time in three years last week as monetary policymakers fear inflationary pressures could start to spread. The bank announced the mandate renewal minutes after the federal Liberals outlined its economic projections and fiscal track in Budget 2026 on Thursday. --- Craig Lord, The Canadian Press This report by The Canadian Press was first published Nov. 5, 2026.
