Under this regime, not only has inflation in Canada remained near the target in recent years, but inflation expectations are now anchored near 2 per cent. As a result, market signals can be sent and received more clearly, and Canadian businesses and consumers are more confident about the future value of their money.
A critical feature of our inflation-targeting system is that we operate symmetrically around our target. This means that we care just as much about inflation falling below target as we do about inflation rising above it. This symmetric approach helps keep the Canadian economy near its production potential, thus encouraging strong, sustained growth in output and employment.