Canadian monetary policy While the Canadian economy is importantly affected by developments in its largest trading partner, Canadian monetary policy is set for overall Canadian conditions and is guided by our 2 per cent inflation target.
Given that the United States was the epicentre of the financial crisis and that the Canadian financial system has continued to function well, it is not surprising that our two economies have performed very differently. It is entirely appropriate that our monetary policies have diverged somewhat. Consider the responses to the extraordinary monetary and fiscal stimulus enacted in the wake of the crisis.