Another special factor is the impact of the Ontario government’s reduction in electricity prices. Like the United States, these one-off factors account for roughly two-thirds of this year’s shortfall in total inflation in Canada. The bottom line is that the fundamental drivers of inflation, along with some special factors we can identify, can explain the recent behaviour of inflation reasonably well.
Certainly, the remaining shortfall is well within a reasonable margin of error, given that we are working with statistical relationships. Furthermore, the underlying trend in inflation is well within the target range we have committed to. In short, we understand inflation well enough for policy purposes.