Bank of Canada Renews Framework and Keeps 2 Percent Inflation Target

The Bank of Canada and the Government of Canada unveiled a renewed five year monetary policy framework on Thursday, November 5, 2026, and kept the inflation target unchanged at 2 percent, Reuters reported.

The Bank said on its official renewal page that the most recent review concluded with a renewal for another five years, from January 2027 to December 2031. The renewed agreement maintains a 2 percent inflation target at the midpoint of a 1 percent to 3 percent inflation control range.

Dow Jones Newswires reported that the Bank and the finance department agreed on Thursday to renew the inflation targeting framework for another five years, with an emphasis on keeping headline inflation at 2 percent. That rate is measured as the 12 month change in the consumer price index.

What the renewal keeps in place

The decision keeps the target that was already in place. The target stays at 2 percent, and the control range around it stays at 1 percent to 3 percent. The new period runs for five years, from January 2027 through December 2031, after the current review period ends.

The Bank published the outcome on its monetary policy framework renewal page, which states that the review concluded with the renewal and gives the dates and the target in full. Reuters and Dow Jones Newswires both reported the joint announcement on Thursday.

One change from the 2021 renewal

Unlike the renewal in 2021, references to securing maximum employment were absent in the joint statement, Dow Jones reported. The statement centred on the inflation target itself, on the 2 percent headline rate, and on the consumer price index measure used to judge it.

That absence is the clearest difference between this renewal and the last one that the reporting identifies. The target, the range and the five year term are unchanged in the terms reported on Thursday.

The rate backdrop

The renewal lands after a recent rate increase. Dow Jones reported that late last month the Bank of Canada raised its policy rate by a quarter point to 2.5 percent. The Bank acted on the expectation that inflation will remain above 3 percent until late next year, Dow Jones reported.

That expectation sits above the top of the 1 percent to 3 percent control range. The renewed framework keeps the 2 percent midpoint as the aim for the years from 2027 to 2031, while the current rate decision deals with inflation that is expected to stay higher in the near term.

What comes next

Further details will be forthcoming in a speech Bank of Canada Governor Tiff Macklem is scheduled to deliver on November 24 in Toronto, Dow Jones reported. The speech is the next dated step in the story, and it falls before the new framework period starts in January 2027.

For now, the terms are set. Canada keeps a 2 percent inflation target, inside a 1 percent to 3 percent range, for January 2027 to December 2031, and the policy rate stands at 2.5 percent after the quarter point rise reported late last month.