While the second component has been in place for almost 60 of the past 70 years, our inflationtargeting regime was implemented in 1991 and the current specification has existed since 1995. This framework has served Canada well in the face of significant movements in commodity prices and Canada’s terms of trade, as well as other shocks, including the Great Recession.
Inflation has averaged just below 2 per cent since we implemented the target, and both output growth and inflation have been much more stable relative to before 1991.