Sharon Kozicki: Canada's monetary policy framework in a world of supply-driven trade-offs

Remarks by Ms Sharon Kozicki, Deputy Governor of the Bank of Canada, at the Norges Bank (Central Bank of Norway) Monetary Policy Mandate Conference, Oslo, 2 March 2026.

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

Central bank speech  | 
10 March 2026
by Sharon Kozicki
PDF full text
(496kb)
  |  13 pages

Introduction

Thank you for the kind introduction. It's a pleasure to be here in Oslo to discuss monetary policy frameworks.

The Bank of Canada's framework is a joint agreement with the federal government that is renewed every five years. The next renewal is coming up later this year. So I am delighted to participate in this event on central bank mandates at a time when ours is top of mind.

Our framework focuses on delivering low and stable inflation for Canadians. It sets an inflation target of 2%, at the midpoint of a 1% to 3% band. The objective is clear: return inflation to the target over time. The framework provides some flexibility for how long it could take to return inflation to target, especially when it has stayed well within the band.

This kind of flexible inflation targeting has been very successful. In the 25 years before the COVID-19 pandemic, inflation in Canada averaged very close to 2%. And it was inside the band more than 80% of the time (Chart 1).

The views expressed in this speech are those of the speaker and do not necessarily reflect those of the BIS.