That's a quick sketch of the transmission mechanism, and I would encourage you to look up a fuller description on our web site at: www.bankofcanada.ca/en/monetary_mod/index.html. My key point here is that the whole process takes time.
Monetary policy actions take 12 to 18 months to have most of their effects on total spending, and another 3 to 6 months to have most of their effects on inflation. This means that the Bank of Canada has to be forward-looking, taking actions based on projections of future pressures on inflation.