Ottawa – Parliament should conduct a long-overdue review of the Bank of Canada’s mandate and legislation before the central bank and the federal government renew their agreement on Canada’s monetary policy framework in 2026, the Senate Committee on Banking, Commerce and the Economy said in an interim report released Tuesday.

The Bank of Canada continues to be tested by the complex and uncertain global economy, and the committee wants to ensure that the bank’s monetary policy supports the Canadian economy and offers transparency on inflation rates. Following the launch of its study this fall, the committee prepared this interim report and intends to release a full report at the end of its study with specific recommendations.

Given the fundamental role of the Senate in providing sober second thought, the committee feels it is well placed to conduct an in-depth review of the Bank of Canada’s mandate and legislation before 2026. Measures that merit further investigation include the adoption of a dual mandate, regular external statutory reviews, legally requiring regular reporting to and appearances before Parliament, changing the way in which deputy governors are selected, and assessing their roles and responsibilities.

Quick Facts

• On October 10, 2024, the committee was authorized to examine and report on Canada’s monetary policy framework, with a particular focus on the Bank of Canada’s legislative and public mandate, operational inflation target and preferred measures of inflation.
• The Bank of Canada is responsible for monetary policy in Canada aimed at keeping inflation low, stable and predictable. While its role and the development of monetary policy has evolved over time, the bank’s legislated mandate has not changed since the enactment of the Bank of Canada Act in 1934.
• The federal government and the Bank of Canada review and renew the agreement on Canada’s monetary policy framework every five years. The agreement is tabled in Parliament. The most recent 2021 agreement will expire in 2026.

Quotes

“The upcoming renewal of the agreement on Canada’s monetary policy framework marks a pivotal moment for the central bank. Our committee is taking a serious look at how the bank achieves its mandate and how it can improve its transparency and accountability.”

- Senator Pamela Wallin, Chair of the committee

“Geopolitical concerns, pandemics and the energy transition, among other uncertainties, are all testing the global economy and how the Bank of Canada tackles inflation. Is the 90-year-old legislation that shaped the bank still relevant and effective in the current context? This is a critical question worth answering urgently.”

- Senator Tony Loffreda, Deputy Chair of the committee

Associated Links

• Read the interim report: Study on Canada’s Monetary Policy – Interim Findings
• Follow the committee on social media using the hashtag #BANC.
• Subscribe to email alerts for Senate committees.
• Sign up for the Senate eNewsletter.

For more information:
Chelsea DeFazio
Communications Officer | Senate of Canada
343-576-1481 | chelsea.defazio@sen.parl.gc.ca