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In early 1994, Canada's economic situation was not that favourable - our economy was facing some rather serious problems. Today, too, we face some challenges. But our overall economic and financial situation is much stronger now than it was seven years ago.

Commentary and technical data relating to the 2016 target renewal.

Governor Tiff Macklem discusses key issues involved in the Governing Council’s deliberations about the policy rate decision and the MPR.

This is an account of the deliberations of the Bank of Canada’s Governing Council leading to the monetary policy decision on April 29, 2026.

Although many countries have abandoned monetary targeting in recent decades, monetary aggregates are still useful indicators of future economic activity. Past research has shown that, compared with other monetary aggregates and expressed in real terms, net M1 and gross M1 have traditionally provided superior leading information for output growth.

Canada and Italy share many similar characteristics. We both belong to the G-7, and we are among the smaller members of that group. Our two economies vary greatly from region to region, both in terms of structure and strength.

The winter Business Outlook Survey continues to provide signs of strengthening demand, especially among export-oriented firms and manufacturers. However, the outlook for businesses that are linked directly or indirectly to the energy sector has deteriorated.

Results in the first quarter of 2023 show that consumer expectations for inflation one to two years ahead fell but remain elevated, particularly for services. Consumers, especially indebted households and equity-deserving groups, are facing financial pressures and limits on their spending due to high inflation and increasing interest rates. Consumers expect to spend less on discretionary services, such as travelling and eating out. Canadians continue to anticipate a recession in the next 12 months. Many are uncertain about where the economy and job markets are going. Despite this, workers still see the labour market as strong and expect wage growth to increase.

Results from the spring Business Outlook Survey point to a moderation from previously high levels of domestic and foreign demand for firms in most regions. Investment and employment intentions remain positive.

Monetary policy actions take a relatively long time to affect the economy and inflation—anywhere between 12 to 24 months. Because of this, central banks must always look ahead and must put in place today the monetary conditions that are needed to help keep the economy on a sustainable path down the road. By 'sustainable' I mean a situation where economic growth and job creation are not at risk from rising inflation.