The outcome of that search was the eventual adoption of inflation targets as the anchor for Canadian monetary policy. In February 1991, the Bank and the federal government announced an agreement on a series of inflation-reduction targets.
This agreement has been extended three times, and since 1995, it has called for the Bank to keep inflation at 2 per cent, the midpoint of a 1 to 3 per cent target range. This inflation-targeting system, supported by a floating exchange rate, has done more than keep inflation low - it has delivered strong and sustained growth in output and employment in Canada.