The Bank of Canada reviews the way it sets interest rates every five years. It then takes its findings to the Finance Department and the two work out whether any tweaks are warranted.
Changes are rarely made, as the search for a better method than targeting inflation has been akin to the quest for extraterrestrial life: it’s out there in theory, but the PhDs have yet to prove it in real life.
Nevertheless, there is no economic policy more important than the Bank of Canada’s mandate, so it ought to be subjected to a fairly rigorous postmortem.
The last time that happened, the central bank only made a half-hearted effort to involve the public, dispatching a deputy governor to give a speech on the subject in November 2014, and then barely mentioning it again until October 2016, when Stephen Poloz, then governor, and Bill Morneau, then finance minister, announced they were re-upping Canada’s approach to monetary policy without any changes.
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