September 3, 2025
What is a flexible exchange rate?
Canada has a flexible exchange rate. The value of our dollar is not fixed to the value of any other currency or to a precious metal such as gold.
Consult these brief articles explaining topics related to our core functions.
18
result(s)
August 14, 2025
The difference between a trade surplus and a trade deficit
A trade surplus and a trade deficit are both measures of a country’s balance of trade. They are a calculation of whether a country exports or imports more.
Content Type(s):
Explainers
Research Topic(s):
Inflation and prices,
International topics
June 17, 2025
Understanding our policy interest rate
At the heart of the Bank of Canada’s monetary policy is the target for the overnight rate. See what it is—and what it means for you.
Content Type(s):
Explainers
Research Topic(s):
Monetary policy
June 11, 2025
What is a tariff?
A tariff is a tax on imports from another country. It can increase the prices consumers and businesses pay for that good.
Content Type(s):
Explainers
Research Topic(s):
Credibility,
Expectations,
Inflation and prices,
International topics
February 18, 2025
What does the Bank of Canada do?
The Bank has five main areas of responsibility that affect Canadians’ everyday lives.
Content Type(s):
Explainers
February 18, 2025
How is the Bank of Canada run?
The Bank of Canada is a Crown corporation that is run independently from the government.
Content Type(s):
Explainers
February 18, 2025
Is the Bank of Canada independent from government?
The Bank of Canada is a Crown corporation that is owned by the federal government, but we are separate from the political process.
Content Type(s):
Explainers
February 3, 2025
Understanding quantitative easing
QE is a tool that encourages spending and investment—helping us to achieve our inflation target by stabilizing the economy.
Content Type(s):
Explainers
Research Topic(s):
Inflation targets,
Monetary policy
December 20, 2024
What is a central bank?
A central bank works to promote a country’s economic stability and its citizens’ financial well-being.
Content Type(s):
Explainers
July 28, 2022
Understanding seigniorage
At the Bank of Canada, we cover the cost of day-to-day business with “seigniorage,” which means earning money from issuing bank notes.
Content Type(s):
Explainers
Research Topic(s):
Bank notes
December 24, 2021
Understanding the output gap
The output gap is the difference between what an economy actually produces and what it would produce in an ideal world.
Content Type(s):
Explainers
Research Topic(s):
Productivity
December 24, 2021
Understanding productivity
High productivity helps raise our standard of living and keep our economy competitive.
Content Type(s):
Explainers
Research Topic(s):
Productivity
May 19, 2021
Understanding the consumer price index
The consumer price index (CPI) tracks how much the average Canadian household spends, and how that changes over time. At the Bank of Canada, we use it to target inflation.
Content Type(s):
Explainers
Research Topic(s):
Inflation and prices,
Inflation targets
April 5, 2021
Understanding how monetary policy works
It takes time for our policy decisions to filter—or be transmitted—through the economy and financial system.
Content Type(s):
Explainers
Research Topic(s):
Monetary policy
August 13, 2020
Understanding inflation targeting
At the Bank of Canada, we aim to keep inflation close to 2 percent.
Content Type(s):
Explainers
Research Topic(s):
Inflation and prices,
Inflation targets
August 13, 2020
Understanding inflation
Inflation is a persistent rise in the average level of prices over time.
Content Type(s):
Explainers
Research Topic(s):
Inflation and prices,
Inflation: costs and benefits
August 13, 2020
Understanding exchange rates
The foreign exchange market determines how much the Canadian dollar is worth. At the Bank of Canada, we very rarely intervene to support its value.
Content Type(s):
Explainers
Research Topic(s):
Exchange rates
January 31, 2020
Understanding money in the 21st century
Here's what money does—and how we’re handling it in the digital age.
Content Type(s):
Explainers
Research Topic(s):
Bank notes,
Digital currencies and fintech