May 14, 2026
What does the Bank of Canada do?
The Bank has five main areas of responsibility that affect Canadians’ everyday lives.
Consult these brief articles explaining topics related to our core functions.
23
result(s)
May 14, 2026
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
Subject(s):
About the Bank
February 6, 2026
What is money?
We use money to pay for goods and services. Canadians are using digital money more than ever before, but cash still plays an important role in our economy.
Content Type(s):
Explainers
Subject(s):
Currency,
Bank notes,
Digital currency,
Financial system,
Fintech
January 19, 2026
What is gross domestic product?
Gross domestic product (GDP) is a measure of a country’s total economic output—the total value of all goods and services produced within that country—usually over the course of one year.
Content Type(s):
Explainers
October 3, 2025
The difference between the price level and inflation
Price levels are a measure of the average cost of goods and services in the economy at a particular point in time. Inflation measures the rate of change in prices over a specific period.
Content Type(s):
Explainers
Subject(s):
Monetary policy,
Economy/Economic growth,
Inflation,
Inflation targeting framework
September 29, 2025
Why we target 2% inflation
Inflation measures the rate of growth in prices, and the Bank of Canada aims to keep it at 2%. When inflation is low, stable and predictable, the entire economy works better.
Content Type(s):
Explainers
Subject(s):
Monetary policy,
Economy/Economic growth,
Inflation,
Inflation targeting framework
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.
Content Type(s):
Explainers
Subject(s):
Financial system,
Financial markets,
Monetary policy,
Economy/Economic growth
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
Subject(s):
Financial system,
Financial stability,
Monetary policy,
Economy/Economic growth,
Inflation
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
Subject(s):
Monetary policy,
Economy/Economic growth,
Inflation targeting framework
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
Subject(s):
Monetary policy,
Economy/Economic growth,
Inflation,
Inflation targeting framework
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
Subject(s):
About the Bank
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
Subject(s):
About the Bank
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
Subject(s):
Monetary policy,
Economic models,
Economy/Economic growth,
Inflation,
Inflation targeting framework
February 24, 2023
The lifespan of a bank note
At the Bank of Canada, we assessed the life cycle of bank notes to confirm that polymer notes have a smaller environmental footprint than paper notes. Polymer notes have a longer life and then are recycled.
Content Type(s):
Explainers
Subject(s):
Currency,
Bank notes
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
Subject(s):
Currency,
Bank notes,
Funds management,
Monetary policy,
Economy/Economic growth
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
Subject(s):
Monetary policy,
Economic models,
Economy/Economic growth,
Inflation
December 24, 2021
Understanding productivity
High productivity helps raise our standard of living and keep our economy competitive.
Content Type(s):
Explainers
Subject(s):
Monetary policy,
Economy/Economic growth,
Inflation
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
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
Subject(s):
Monetary policy,
Economy/Economic growth,
Inflation,
Inflation targeting framework
January 1, 2021
About legal tender
Find out what “legal tender” means, why legal tender status changes, and how to redeem older bank notes.
Content Type(s):
Explainers
Subject(s):
Currency,
Bank notes
August 13, 2020
Understanding inflation targeting
At the Bank of Canada, we aim to keep inflation close to 2 percent.
Content Type(s):
Explainers
Subject(s):
Monetary policy,
Economy/Economic growth,
Inflation,
Inflation targeting framework
August 13, 2020
Understanding inflation
Inflation is a persistent rise in the average level of prices over time.
Content Type(s):
Explainers
Subject(s):
Monetary policy,
Inflation,
Inflation targeting framework
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
Subject(s):
Monetary policy,
Economy/Economic growth,
Inflation