Carolyn Wilkins: Choosing the best monetary policy framework for Canada

Remarks by Ms Carolyn A Wilkins, Senior Deputy Governor of the Bank of Canada, at the McGill University Max Bell School of Public Policy, Montréal, Quebec, 20 November 2018.

The views expressed in this speech are those of the speaker and not the view of the BIS.

It is a pleasure to speak here at the Max Bell School of Public Policy. As many of you know, Bell was a shrewd business person and media mogul during an era that witnessed the Great Depression, the Second World War and Canada joining the world stage. He was also dedicated to public affairs and the greater good of Canadians.

It is therefore fitting that I am here today to add to a conversation about the best monetary policy framework for Canada. The Bank of Canada opened its doors during Bell's era, in 1935, to support the economic and financial welfare of Canada. What that has meant in practice has naturally changed quite a lot over the years to keep up with a complex and evolving world.

For the last quarter of a century, the Bank's monetary policy framework has been focused on targeting low and stable inflation, in the context of a flexible exchange rate. This is not just the Bank's goal, it is shared with the federal government-both acting on behalf of the people of Canada. This is formalized in what is called the inflation-control agreement. It is renewed every five years and has been supported by six prime ministers of different partisan stripes. We are working on the next renewal, set for 2021, with our Finance colleagues.