October 1, 2026
Canada’s housing affordability dilemma
Senior Deputy Governor Carolyn Rogers discusses housing affordability, focusing on how it became such a challenge over time and why there are no easy solutions.
The Bank of Canada and the Government of Canada review and renew the agreement on Canada’s monetary policy framework every five years. This regular exercise provides an opportunity to assess how well the framework is working and determine what parts of it should be preserved and what could be improved.
The most recent review concluded with the renewal of the framework for another five years—from January 2027 to December 2031. The renewed agreement maintains the cornerstone of the monetary policy framework: a 2% inflation target at the midpoint of a 1% to 3% inflation-control range.
Our approach
The Bank undertook a comprehensive, multi-year review leading up to the renewal of the framework. As part of that review, our researchers examined three key economic issues:
- Monetary policy in a more shock-prone world: Ongoing structural changes to the economy and the likelihood of more frequent supply shocks in the future can lead to upward pressure on inflation and difficult trade-offs for monetary policy. Does Canada need a richer playbook for monetary policy to keep inflation on target?
- Assessing underlying inflation: No single measure of core inflation works well in all circumstances. How should we measure underlying inflation in a more volatile, shock-prone world? What measures of core inflation are most robust to structural change? Does persistently high inflation in shelter prices distort measures of underlying inflation?
- Housing and inflation: Housing costs feed into inflation. But monetary policy cannot directly increase the supply of housing. How does monetary policy affect housing demand and supply, and how does the imbalance between them affect inflation in shelter prices?
The research findings will be published in a forthcoming report.
The renewal process also gave the Bank a chance to hear directly from Canadians. We consulted stakeholders and people across the country about their experiences, questions and perspectives on inflation and monetary policy. A report summarizing what we heard was published in June 2026.
Speeches
March 26, 2026
An anchor of stability in uncertain times
Senior Deputy Governor Carolyn Rogers discusses the big economic forces reshaping the economy, the Bank’s monetary policy framework renewal and affordability.
Content Type(s):
Press,
Speeches and appearances,
Remarks
Subject(s):
Monetary policy,
Economy/Economic growth,
Inflation,
Inflation targeting framework
March 2, 2026
Canada’s monetary policy framework in a world of supply-driven trade-offs
Deputy Governor Sharon Kozicki discusses the challenges of setting monetary policy in a world where supply-side developments are important drivers of inflation.
Content Type(s):
Press,
Speeches and appearances,
Remarks
Subject(s):
Monetary policy,
Economic models,
Economy/Economic growth,
Inflation,
Inflation targeting framework
Research
Climate Change and Monetary Policy: Navigating Physical Risks
Staff analytical paper 2026-44
Tatjana Dahlhaus
Weather-related disasters can reduce output while increasing inflation, creating difficult trade-offs for monetary policy. This note reviews evidence on the macroeconomic effects of physical climate risks and uses a structural model to assess how more frequent and severe disasters could shape future monetary policy challenges.
Content Type(s):
Staff research,
Staff analytical paper
JEL Code(s):
C,
C6,
C68,
E,
E1,
E12,
E3,
E31,
E5,
E52,
F,
F4,
F41,
Q,
Q5,
Q54
Research Theme(s):
Monetary policy,
Inflation dynamics and pressures,
Monetary policy framework and transmission,
Structural challenges,
Climate change
Monetary Policy Challenges in a Volatile World
Staff analytical paper 2026-34
Stefano Gnocchi,
Matteo Cacciatore
Rising volatility and structural shifts—deglobalization, climate risks, and AI—are reshaping inflation and policy trade-offs. Evidence suggests central banks can accommodate supply-driven inflation while balancing inflation and output, as long as expectations stay anchored and policy reflects shock size, persistence, and broader economic conditions.
Content Type(s):
Staff research,
Staff analytical paper
JEL Code(s):
E,
E3,
E31,
E32,
E5,
E52,
E58
Research Theme(s):
Monetary policy,
Inflation dynamics and pressures,
Monetary policy framework and transmission,
Structural challenges,
Climate change,
International trade, finance and competitiveness
Supply and Demand-Driven inflation: Decomposition and policy implications
Staff analytical paper 2026-33
Kira Kang,
Rodrigo Sekkel,
Temel Taskin,
Jing Yang
This note uses detailed expenditure data to decompose Canadian inflation into supply- and demand-driven components. The analysis sheds light on the drivers of post-pandemic inflation and shows that monetary policy primarily affects and responds to demand-driven inflation.
Content Type(s):
Staff research,
Staff analytical paper
JEL Code(s):
E,
E3,
E31,
E5,
E52,
E58
Research Theme(s):
Models and tools,
Econometric, statistical and computational methods,
Monetary policy,
Inflation dynamics and pressures,
Monetary policy framework and transmission
Conferences
Conferences and workshops provided the Bank with the opportunity to explore current economic issues with experts from Canada and around the world.
October 16, 2025
Monetary policy framework renewal workshop
As part of the 2026 monetary policy framework renewal, the Bank of Canada hosted a full-day virtual event with Canadian and international experts from other central banks, universities and think tanks. Participants shared insights and exchanged perspectives on the Bank’s research to date.
Content Type(s):
Conferences and workshops
November 7, 2024
2024 Annual Bank of Canada Economic Conference
Conference held on November 7 and 8, 2024.
Content Type(s):
Conferences and workshops