Overview
The Bank of Canada conducted consultations with stakeholders ahead of the renewal of the monetary policy framework.
The first series of meetings were held in November 2024 with individuals and organizations with deep expertise and interest in the Bank’s work. The meetings sought early input to inform the research questions guiding the framework renewal.
Participants included academic researchers, think tanks, business groups, unions and labour economists, and private sector economists. In total, the Bank held 16 meetings with 30 participants (see Appendix A for details).
The Bank organized a second series of meetings from September 2025 to February 2026 to gather feedback on the three main research themes of the renewal.
The Bank engaged with financial institutions and pension fund managers, think tanks, business and employer associations, unions, consumer groups and civil society organizations. In total, the Bank held 20 meetings and round tables with 59 participants representing 37 organizations (see Appendix B for details).
Discussion summaries
Topic 1: How to deal with supply shocks
Participants discussed the growing frequency and persistence of shocks driven by environmental factors, deglobalization and digitalization in an increasingly multipolar world order. They highlighted the fact that the transition to a net-zero economy and shifts in global trade pose uneven risks across regions in Canada. They also noted that positive supply shocks—such as productivity gains from artificial intelligence—should not be overlooked as the Bank assesses its approach to monetary policy in a more volatile world.
There was broad agreement among participants that responses to supply shocks must be flexible and depend on prevailing economic conditions. Some economists suggested treating supply shocks as temporary and to “look through” them. Others cautioned against such rigid rules that could limit the Bank’s ability to respond when shocks—such as those experienced during the pandemic—prove persistent.
Participants recommended the Bank develop a richer risk management framework. Multiple stakeholders suggested that the Bank maintain the flexibility inherent in the framework to stabilize prices and deal with various types of shocks, whether those shocks are driven by supply or demand, big or small, transitory or persistent.
Given the limited ability of monetary policy to address supply-side shocks, some participants highlighted that fiscal policy may need to play a more prominent role when responding to future shocks.
Regardless of how the Bank responds to a shock, most stakeholders encouraged the Bank to communicate more clearly about its actions and articulate how policy decisions may differ across situations.
Think tanks and consumer groups recommended doing disaggregated analysis to understand the distributional impacts of shocks as they occur because the impacts may be concentrated in certain sectors, regions or demographic groups. These shocks can disproportionately affect immigrants, low-income workers and seniors on fixed incomes.
Topic 2: How to assess and communicate about inflation
Participants overwhelmingly emphasized the need for simplicity and transparency in the Bank’s use of measures of core inflation. Many private sector economists indicated that too many measures have been used by the Bank over the past decade, which has led to some confusion.
Economists acknowledged that measures of core inflation can be a useful tool to cut through the volatility in total CPI. However, most participants recommended that the Bank reduce the emphasis on its preferred measures of core inflation in its analysis and communications, given that a measure’s effectiveness can depend on the shock or economic cycle. Most participants also recommended that the Bank’s public communications focus primarily on total inflation, which is the Bank’s target variable.
Some participants indicated they would like the Bank to identify a single measure of core inflation that it uses in setting monetary policy, although most acknowledged that there is no single perfect measure. The consumer price index (CPI) excluding the eight most volatile components of inflation (CPIX) was deemed useful by private sector economists because of its predictive value and the fact that it is easily replicable.
When asked if they would welcome the publication of a dashboard of inflation indicators, most participants reacted positively but asked that it be limited to a handful of relevant indicators that are easy to replicate and communicate. Economists thought a dashboard could be a useful monetary policy communications tool, while civil society groups believed it could help Canadians understand complex information more easily, particularly if it includes definitions in plain language and an explanation of how each indicator is used.
Many stakeholders highlighted that the current CPI basket, which is an aggregate measure across all households, isn’t seen by many Canadians as reflecting their lived experience. This can lead to diminished trust in inflation data and, by extension, in the Bank.
Indigenous participants noted that the CPI does not accurately reflect price pressures faced by Indigenous Peoples because the consumption basket differs. For example, transportation costs are significantly higher due to limited substitutes.
Civil society groups and think tanks suggested improving how inflation is measured. They also called for the development of tools that could complement the CPI, such as:
- a basic-needs basket that places more weight on food, shelter and transportation to better capture inflation experienced by low-income households
- an affordability index (including shelter and energy costs) that could be used for public communication and help account for many Canadians’ lived experience
- a seniors’ price index that would put more weight on the costs of health care, shelter, food and utilities to better reflect the spending patterns of this group
- an assessment of livable income by region (as the Institut de recherche et d’informations socioéconomiques does in Québec)
- an assessment of the typical consumption basket of newcomers along with the CPI
One think tank highlighted the increasing fragility of the CPI in an era of highly dynamic pricing. With prices fluctuating daily, varying by region and being shaped by corporate strategies, long-standing price anchors have shifted. This group encouraged the Bank to investigate dynamic pricing as part of the framework renewal.
Multiple organizations asked the Bank to consider disaggregating the data to see how inflation affects Canadians differently and analyze the uneven impacts of monetary policy.
Equity-seeking groups stressed the disproportionate burden of inflation on women, who are often the sole provider in single-parent families. Inflation in essential goods and services (shelter, food, transportation and child care) leaves women worse off.
A few economists recommended further research into price-level targeting (PLT), even if it was not part of the formal research agenda. If the Bank had a PLT objective during the pandemic, it would likely have needed to raise rates more quickly than it did.
Some private sector economists stressed that measures of inflation expectations are critical to assessing the trend in inflation. They called for better, more timely measures, especially given the loss of market-based gauges such as real return bonds. Some noted that without such measures, market prices may overreact to inflation surprises.
Topic 3: How monetary policy impacts housing
Private sector economists agreed that the Bank must be clear and transparent about the limited role monetary policy plays in housing supply. They warned, however, that the Bank’s role should not be dismissed outright because financial conditions are a consideration for builders. On the demand side, housing affordability is driven more by income and structural imbalances in housing markets.
Most participants suggested the Bank continue to emphasize that it has no policy target with respect to housing. Some encouraged the Bank to clarify what it can and cannot do and to flag where industry, governments and regulators need to act.
With respect to how housing costs are measured, most private sector economists and consumer groups agreed that mortgage interest costs should remain in CPI calculations despite those costs being mechanical linked to the policy interest rate. They are a major household cost and should remain in the measure of inflation that the Bank targets. Some participants suggested that excluding mortgage interest costs from the CPI, or adopting the Swedish model which excludes those costs from the inflation target, was worth considering.
One think tank advocated for the acquisition approach to measuring the cost of owned accommodations. It measures the cost of acquiring a home rather than the ongoing costs of homeownership. They argued that this method better reflects how Canadians experience housing inflation and tracks underlying housing cost pressures. Another think tank advised against the acquisition approach, considering it too volatile.
Many participants recommended focusing more on rent inflation in the Bank’s research and communications. Rate changes affect homeowners and non-owners differently. The Bank was encouraged to pay close attention to these trends. With household debt unevenly distributed, rate changes also have distributional impacts on income and wealth.
The Bank heard from many stakeholders how the groups they represent are affected by current forces in the housing market:
- Business groups mentioned that many of their members have struggled to attract talent in British Columbia and the Greater Toronto Area because workers cannot afford to live near factories or businesses, with some members even buying houses to attract employees.
- Civil society groups mentioned that housing availability has strongly affected women’s safety and economic stability. For example, shelters for women fleeing violence reported increasing difficulty in supporting those in need because women are unable to secure alternate housing and extend their stays.
- Indigenous participants brought up the significant level of disconnect between monetary policy and housing for First Nations because of the way housing is delivered on reserves.
- Consumer groups and civil society organizations underlined that low- and fixed-income households in particular have suffered from the post-pandemic inflation spike. This created a “perfect storm”—mortgage costs, rents and prices for essential goods all rising simultaneously—and has led to increased reliance on food banks and debt to cover basic needs.
- Some participants expressed concern that seniors are unfairly blamed for contributing to the housing shortage and that they could be disadvantaged if there was a decline in house prices. Some older people simply cannot afford to move out of their house because of the high costs associated with living in retirement and care facilities. A growing number of older Canadians are turning to reverse mortgages to supplement their income.
- Stakeholders shared that immigrants also felt they were being scapegoated for current housing challenges. These groups underscored that newcomers are in fact facing very steep housing costs because they have limited credit history, are required to provide a higher deposit and need co-signers.
- Community-based organizations indicated that housing challenges are experienced differently in rural areas, and they are trying to step in and help develop mixed-use spaces or create a modified shared home equity ownership model.
Other topics raised
The Bank’s mandate and inflation target
Overall, there was strong support for maintaining flexible inflation targeting and the 2% target. The target is well understood, credible and plays a key role in anchoring inflation expectations. The bar for change was very high among participants. Most did not support re-evaluating alternative monetary policy frameworks, as the Bank did for the 2021 renewal, because it could undermine the clarity of the target and impact the Bank’s credibility.
Labour organizations recommended the Bank consider a dual mandate where an employment goal is explicitly stated alongside the inflation target. Some also suggested raising the target altogether—for example, to 3%—to give the Bank more room to manoeuvre in a crisis.
One think tank suggested keeping the language about maximum sustainable employment introduced in the framework agreement in 2021, even if CPI inflation remains the target. But many other stakeholders suggested removing this language to avoid confusion with the Bank’s inflation-control objective.
Participants encouraged the Bank to continue using its platform and ability to bring people together to move important conversations forward, even if the topics are outside its remit. They cited the Bank’s leading role in the debate on productivity in Canada as an example of how the Bank can shape economic policy. Demographic change was cited as an issue that does not currently receive enough attention.
Some stakeholders called for increased transparency and accountability from the Bank on its policy-making process, including the policy actions taken during the pandemic.1
The Bank’s communications
The Bank’s communications were a recurring topic throughout the discussions. To foster greater confidence in the Bank, many stakeholders advocated for more plain language and accessible explanations of Bank decisions that relate more directly to people’s experience with inflation.
Concerns about the politicization of the Bank over the past few years were also brought up repeatedly.
Consumer groups noted that the Bank’s communications seem tailored to market participants and business leaders as opposed to the public. This created a perception that the Bank is not concerned about the impact of its decisions on Canadians’ financial well-being.
Private sector economists underlined that many Canadians are pessimistic about the current economic environment. Inflation is close to the target, but affordability concerns are top-of-mind for Canadians, which presents communications challenges for the Bank. Canadians want prices to come down, not just to increase more slowly. Stakeholders encouraged the Bank to bridge this communication gap by explaining the difference between inflation and affordability as well as the perils of falling prices. Many stakeholders encouraged the Bank to more proactively explain that the Bank is not targeting affordability.
Some participants would also like to see the Bank partner with other organizations, such as women’s groups and newcomers’ associations, to help disseminate information about its mandate and decisions. One consumer group suggested increased efforts to build understanding of the relationship between the policy interest rate and other interest rates, given that a large portion of the population does not have access to a financial advisor.
Appendix A: 2024 consultation participants
Academics and think tanks
- Bank of Canada fellows
- Institute for Research on Public Policy
- C.D. Howe Institute
- Centre for Future Work
- Atkinson Foundation
- Tulo Centre of Indigenous Economics
Private sector economists
- RBC
- Scotiabank
- BMO
- CIBC
Business groups
- Canadian Federation of Independent Business
- Canadian Chamber of Commerce
- Canadian Council for Indigenous Business
Labour groups
- Unifor
- Canadian Labour Congress
Appendix B: 2025-26 consultation participants
Financial institutions and pension funds
- TD Bank
- RBC
- National Bank
- Scotiabank
- BMO
- CIBC
- Desjardins
- Alberta Investment Management Corporation
- PSP Investments
- Ontario Teachers’ Pension Plan
- Investment Management Corporation of Ontario
- Caisse de dépôt et placement du Québec
- British Columbia Investment Management Corporation
- Healthcare of Ontario Pension Plan
Policy and research voices
- Fraser Institute
- Macdonald-Laurier Institute
- Centre for the Study of Living Standards
- Canadian Shield Institute
- Centre for Future Work
- Atkinson Foundation
Business and employer associations
- Business Council of Canada
- Canadian Chamber of Commerce
- Canadian Manufacturers and Exporters
- Canadian Federation of Independent Business
- Canadian Women’s Chamber of Commerce
Equity-seeking and community groups
- Canadian Women’s Foundation
- Centre for Newcomers
- United Way Centraide Canada
- Prosper Canada
- Affordability Action Council
Unions
- Canadian Labour Congress
- Unifor
Consumer groups
- Consumers Council of Canada
- Union des consommateurs
Families, young people and seniors
- Generation Squeeze
- Canadian Association of Retired Persons
- FADOQ