While the IMF was very critical of Canada’s decision to float, it accepted our action on the condition that this move would be temporary. The IMF expected Canada to return to the Bretton Woods system  BIS Review 42/2005  1  as soon as a new equilibrium rate for the Canadian dollar was found.
But the flexible exchange rate worked better than almost all observers had expected, and the “temporary period” lasted for 12 years. With the exchange rate allowed to float freely, the Bank of Canada was able to direct monetary policy to the needs of the Canadian economy. We were able to deal with the inflationary threat posed by rapid economic growth and strong investment flows.