Businesses and individuals end up spending more time and money either protecting themselves against inflation or trying to benefit from it. And interest rates rise to compensate savers and lenders for expected higher inflation and for the risks caused by uncertainty about future inflation. None of this encourages productive investment.
In the high-inflation days of the 1970s and 1980s, a lot of economic resources were instead devoted to hedging and speculative purchases. And inflationary booms - here and elsewhere - inevitably turned into busts. We must not let this happen again. That is why the Bank of Canada and the Government of Canada have agreed to an explicit target for inflation control.